Top Trade Ideas for the Week of June 4, 2012: Bonus Idea
- Posted by Greg Harmon
- on June 4th, 2012
Here is your Bonus Idea with links to the full Top Ten:
General Electric, Ticker: $GE
General Electric, $GE, is retesting support at 18.40 for the third time from a series of lower highs. The Relative Strength Index (RSI) is bearish and heading lower with a Moving Average Convergence Divergence (MACD) indicator that has crossed negative. The Bollinger bands are also opening lower as volume is increasing on this move lower. Under 18.40 there is support at 18.07 and the gap down to 17.92 before a second gap between 17.50 and 17.44 and support lower at 17. Resistance on a continued hold at 18.40 is found higher at 18.91 and 19.42 before 19.83 and 20.30.
Trade Idea 1: Enter short on a move under 18.30 with a 45 cent trailing stop. Take off 1/3 at 17.44 and another 1/3 at 16.55.
Trade Idea 2: Buy the June8w 18 Puts on a move under 18.30. These were offered at 15 cents late Friday, so you may decide to start legging into them now.
Trade Idea 3: Buy the June8w/June Monthly 18 Put Calendar for 13 cents. This is a bet that the move lower will be a bit slow and not break 18 by this Friday for optimal return.
Trade Idea 4: Buy the July 18/16 Put Spread on a move under 18.30. These were offered at 47 cents late Friday. This gives the trade lower more time and offers a 4:1 Reward to risk ratio.
Trade Idea 5: Buy the July 18/16 1×2 Ratio Put Spread, buying the July 18 Put and selling 2 of the July 16 Put. These were offered at 25 cents late Friday. This reduces the cost and gives a long entry with a basis of 14 on a close under 16 on July Expiry. A close at 16 gives a $1.75 profit.
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After reviewing over 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.
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If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
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