Top Trade Ideas for the Week of June 25, 2012: Bonus Idea
- Posted by Greg Harmon
- on June 25th, 2012
Here is your Bonus Idea with links to the full Top Ten:
Nuance Communications, Ticker: $NUAN
Nuance Communications, $NUAN, is forming a bull flag in its second step off of a bottom at 19.33. A move over 23 triggers a Measured Move to 25.90. There is resistance along the way at 24 and 25.40 followed above by 26.80 and 28.10. It has support for further upside movement from a rising Relative Strength Index (RSI) that is about to move into bull territory with a Moving Average Convergence Divergence (MACD) indicator that is positive and growing. It is riding the Bollinger band expansion higher with a 8% short interest to help fuel the fire. Support lower comes at 22.25 and 21.50 followed by 20.40 and 19.50.
Trade Idea 1: Buy the stock on a break over 23 with a 50 cent trailing stop.
Trade Idea 2: Buy the July 23 Calls on the same trigger and using the same stock price as a stop. These were offered at 90 cents late Friday.
Trade Idea 3: Buy the August 23/27 Call Spread on the same trigger. These were offered at $1.25 late Friday, offering a 3.2:1 reward to risk ratio.
Trade Idea 4: Sell the August 20 Put. this was offered at 50 cents late Friday and can be used to collect premium against the same stock price stops, or as a means to enter with a basis of 19.50, the June low.
Trade Idea 5: Buy the July 23/25/26 Broken Call Butterfly. Buying both the July 23 and 26 Calls and selling 2 of the 25 Calls, this was offered for 60 cents late Friday. It is profitable above 23.60, has a maximum profit of $1.40 at a price of 25 on July Expiry and then trails to a minimum of 40 cents at 26 or above.
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After reviewing over 1,000 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, heading into the last week of the second Quarter, look for Gold and Crude Oil to continue lower. The US Dollar Index is poised to move higher with US Treasuries continuing to consolidate with a slight downside bias in the short term. The Shanghai Composite looks headed lower while Emerging Markets continue the bear flag in the broad consolidation. Volatility looks to remain low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The view on Crude Oil contradicts this as Oil and Equities have been correlated, and a move higher by the US Dollar Index or especially Treasuries would likely bring Equities lower. Despite this the charts for the SPY, IWM and QQQ all show a short term upside bias within consolidation on the weekly view. Use this information as you prepare for the coming week and trade’m well.
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.
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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