Top Trade Ideas for the Week of September 6, 2011: The Rest
- Posted by Greg Harmon
- on September 5th, 2011
Here are the Rest of the Top 10:
Biogen Idec, Ticker: $BIIB
Biogen Idec is in a bear flag after a big move lower. If it falls under the flag, under 91, it has support lower at 88, followed by 85, and then 82.50 on the way to the target of 73 at the gap fill. The Relative Strength Index (RSI) is rolling lower and the Moving Average Convergence Divergence (MACD) indicator is starting to fade, both supporting a downside move. It would take a move over 98 to start thinking about an upside trade.
Finisar Corp, Ticker: $FNSR
Finisar printed a Shooting Star candle Friday at previous resistance, signalling a reversal lower if confirmed lower. A move under 20 has support at 18.70, followed by 17.80. If it holds the gap up and moves higher then 22.50 and 23.50 are resistance higher. The RSI and MACD, both rising, suggest it may hold the gap. Short Interest is elevated at 12% which could add to a move higher. It also makes the short trade a little more susceptible to a short squeeze. To limit risk on the short consider buying a September 20/18 Put Spread, buying the September 20 Put and selling the September 18 Put. Based on the closing market levels from Friday this could be bought for 75 cents. With a reward to risk potential of 2.66:1 vs losing the full spread, you might also take the trade off on a move below 50 cents on the spread, and definitely if the stock closes over 21.10.
Molycorp, Ticker: $MCP
Molycorp is in a symmetrical triangle with the RSI and MACD moving sideways around the mid line giving no guidance on a future move. If it falls under 52 then there is support at 48.2 followed by 46 on the way to a target of 32 on a Measured Move (MM) to 32. If it breaks the triangle higher over 57.80 then there is resistance at 58, followed by 61, and then 66.30. Short interest is elevated in the name at about 10% so you can manage risk on a short trade with a September 52.50/46 Put spread which would have cost 1.36 based on Friday’s closing levels. If it moves quickly then this stock also has weekly options that can be used.
Penn Virginia Resource Partners, Ticker: $PVR
Penn Virginia Resource Partners is in a bull flag, but with a RSI that is drifting higher and a MACD that increasing, supporting more upside. If it can get over 26.20 it has resistance higher at 26.50, followed by 27.25 and 27.50 with a MM to 28.50. This has shown some topping tails so wait for the break higher to confirm before entering long.
Pharmasset, Ticker: $VRUS
Pharmasset is testing bottom of an ascending triangle after rejecting at eh top rail last week. If it breaks lower, under 63, then the next level of support is at 61, followed by 56 and then 51.60. If it at the bottom rail then it has resistance at 65 followed by 69, the triangle top. The RSI rolling lower and the MACD fading support a downside move.
Up Next: Bonus Idea
After reviewing over 900 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Saturday which looks like the moves that revealed themselves Friday will continue. Gold and US Treasuries are ready to continue higher. Crude Oil looks poised to drop further and the US Dollar Index to move sideways in the top of its range. The Shanghai Composite and Emerging Markets look to continue lower. Volatility looks to continue elevated with the US Equity Index ETF’s SPY, IWM and QQQ ready to continue lower in their bear flags. US Treasuries breaking out and Gold racing higher again could be the catalyst for a break of the bear flags lower. Use this information as you prepare for the coming week and trade’m well.
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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.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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