Here is your Bonus Idea with links to the full Top Ten:
Microsoft, $MSFT, broke out of consolidation and trended to the upside throughout 2017. It gapped up in November and then resumed the path higher in January. It made a top at the end of the month and pulled back with the market in February. The pullback reached the 100 day SMA and then reversed to the upside. It retested the prior top and pulled back again, this time to support and the 20 day SMA. The strong candle Friday suggest a bottom and continuation would give a target to 103.50.
The RSI is in the bullish zone with the MACD positive and looking at a cross down. Further upside should turn that. There is no resistance over 96. Support lower comes at 91 and 88 then 85 and 82.25 before 81.25 and a gap fill to 79.35. Short interest is low under 1%. The company is expected to report earnings next April 26th and the stock will not trade ex-dividend until mid-May.
The March options chain shows most open interest at $2.50 increments, and biggest on the call side at 95 and 97.50. The April options also show most open interest on the call side with the biggest open interest at the 90 call strike. The first chain that covers the earnings report is June and the open interest is biggest on the call side there as well. The biggest strikes are 87.5 then 95 and 100.
Trade Idea 1: Buy the stock now (over 91) with a stop at 90.
Trade Idea 2: Buy the stock now (over 91) and add June 90/85 Put Spread ($1.65) for protection, selling the June 105 Calls ($1.04) to lower the cost.
Trade Idea 3: Buy the March/June 95 Call Calendar ($3.33). As the March Calls expire sell longer dated calls above the current price.
Trade Idea 4: Buy the June 95/105 Call Spread ($3.05) and sell the June 85 Puts ($1.91), for a bullish Call Spread Risk Reversal.
After reviewing over 1,000 charts, I have found some good setups for the week. This week’s list contains the first five below to get you started early. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which as the calendar turns to March sees the equity markets again looked weak only to finish with a strong Friday, like February 9th.
Elsewhere look for Gold to continue to consolidate in a broad range while Crude Oil may pause in its short term downtrend. The US Dollar Index continues to consolidate sideways while US Treasuries are consolidating after their move lower. The Shanghai Composite is biased to the downside short term and Emerging Markets look to tighten their broad consolidation at the recent top.
Volatility looks to remain elevated keeping the bias lower for the equity index ETF’s SPY, IWM and QQQ. Their charts showed big moves lower this week and then strength on Friday suggesting a possible reversal. The weekly charts are not as optimistic with red candles at lower highs. Use this information as you prepare for the coming week and trad’em well.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.