Top Trade Ideas for the Week of December 17, 2012: Bonus Idea
- Posted by Greg Harmon
- on December 17th, 2012
Here is your Bonus Idea with links to the full Top Ten:
Bank of America, Ticker: $BAC
Bank of America, $BAC, moved above the closely watch resistance at 10 and drove higher. Now consolidating at 10.50 in a bull flag it has a Relative Strength Index RSI that is bullish and running flat along the technically overbought level with a Moving Average Convergence Divergence indicator (MACD) that is positive, but might be stalling. The current level is also the Measured Move target from the September-October ascending triangle break. If it can break the flag higher there is a Measured Move higher to 11.20. Be careful as the Open Interest (OI) in the December Options shows the maximum at the 10 Strike Call and 9 Strike Put, making the maximum options pain level below 10. From a longer view the 3-box reversal Point and Figure chart (PnF) carries a price objective much higher at 20.
Trade Idea 1: Buy the stock on a move over 10.60 with a stop at 10.47.
Trade Idea 2: Buy the December 10.50 Calls (offered late Friday at 21 cents) on the same trigger.
Trade Idea 3: Buy the January 4 Expiry, 10.50 Strike Calls (34 cents) on the same trigger.
Trade Idea 4: Buy the December28/February 11 Call Calendars (28 cents) and continue to sell weekly 11 Strike Calls if the price does not rise.
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After 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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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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