Top Trade Ideas for the Week of July 9, 2012: Bonus Idea
- Posted by Greg Harmon
- on July 9th, 2012
Here is your Bonus Idea with links to the full Top Ten:
Norfolk Southern, Ticker: $NSC
Norfolk Southern, $NSC, is breaking short term resistance at 71.85 with a bullish engulfing candle Friday, and testing the downward sloping longer term resistance. This Cup and Handle trigger carries a target of 81.65. It has a Relative Strength Index (RSI) that is bullish and rising with a Moving Average Convergence Divergence indicator (MACD) that is positive to support further upside. There is resistance higher at 74 and 75.40 followed by 77.40. Above that are new all time highs. The 3 box reversal Point and Figure chart carries a current price objective of 51, suggesting a range trade, but a print at 78 would change that to a price objective of 86. Support is found lower at 71 and 70.10 followed by 68.40 and 67.25 before 65.10, 64 and 63.10.
Trade Idea 1: Enter long on a move over 72.30 with a $1.35 trailing stop.
Trade Idea 2: Buy the July 72.5 Calls on a move over 72.30. These were offered at 90 cents late Friday.
Trade Idea 3: Buy the August 72.5 Calls on a move over 72.30. These were offered at $1.90 late Friday.
Trade Idea 4: Buy the August 72.50/75 Call Spread Risk Reversal selling the August 67.50 Put on a move over 72.30. These combos were offered at 35 cents late Friday.
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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, as the holiday week ends and many get back to work looks for Gold to continue in a broad range with a downside bias while Crude Oil looks higher with a possibility of consolidation. The US Dollar Index and US Treasuries are set to move higher with the possibility that Treasuries continue to be stuck in their range. The Shanghai Composite is biding time before falling and Emerging Markets are biased to the upside. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts agree on the longer timeframe with pullbacks or consolidation a possibility in the short run. Continue to watch Treasuries and the Dollar Index for reversals that will impact the Equity markets. 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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