Top Trade Ideas for the Week of October 15, 2012: The Rest
- Posted by Greg Harmon
- on October 14th, 2012
Here are the Rest of the Top 10:
Arena Pharmaceuticals, Ticker: $ARNA
Arena Pharmaceuticals, $ARNA, is moving in a very narrow ascending triangle with a top at 9.50. The Relative Strength Index (RSI) is moving in its own ascending triangle, just under bullish territory with a Moving Average Convergence Divergence indicator (MACD) that is near zero. A break of the triangle higher has a Measured Move to 11.90. And with short interest over 20% it could get squeezed.
Ctrip.com, Ticker: $CTRP
Ctrip.com, $CTRP, is moving higher towards resistance from a series of higher lows. It has a bullish and rising RSI and a MACD that is moving to positive to support further upside movement. It carries a price objective on the 3-box reversal Point and Figure chart (PnF) of 28 and the short interest is elevated at over 10%.
Federated Investors, Ticker: $FII
Federated Investors, $FII, is testing support at the bottom of an ascending triangle with a bearish RSI and a negative MACD. A breakdown below the triangle has a target of 16.35.
Metlife, Ticker: $MET
Metlife, $MET, is building a broad bull flag after a move up from a base at 31. The Measured Move out of the flag higher takes it to 39. The RSI is holding in bullish territory and the MACD is trying to move to positive, to support more upside.
Nevsun Resources, Ticker: $NSU
Nevsun Resources, $NSU, is building a bull flag between 4.40 and 5.00. The RSI is holding in bullish territory and the MACD is negative but stalled. A break of the flag higher puts it into the gap and has a target of 5.80 on a Measured Move. The PnF supports this with a price objective of 9.00.
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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, sees heading into the October Options Expiration week markets looking bleak. Gold looks ready to continue lower in the short run while Crude Oil is biased higher. The US Dollar Index seems content to move sideways while US Treasuries are biased lower. The Shanghai Composite is biased to the downside with Emerging Markets looking to continue their consolidation at resistance. Volatility looks to remain subdued, keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, with the view from the Dollar and Treasuries supporting that as well. The charts of the Equity Index ETF’s don’t agree with this as the IWM and QQQ look solidly biased lower and only the SPY in consolidation. Use this information as you prepare for the coming week and trade’m well.
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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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