Top Trade Ideas for the Week of December 24, 2012: Bonus Idea
- Posted by Greg Harmon
- on December 24th, 2012
Here is your Bonus Idea with links to the full Top Ten:
Halliburton, Ticker: $HAL
Halliburton, $HAL, has been moving up off of a higher low at 29.75 since mid November. After a healthy pullback to the 50 day Simple Moving Average (SMA) it made a leap higher and ended the week consolidating at 35.40. A break of the consolidation higher carries a Measured Move to 38, near the September high. The Relative Strength Index (RSI) is bullish and the Moving Average Convergence Divergence (MACD) indicator is positive and growing, both supporting further upside. Resistance comes at 36.90 and 37.90 followed by 38.76 and 39.88. Support lower is found at 34 and 32.90 followed by 31.75, 31 and 29.75.
Trade Idea 1: Buy the stock on a move over 35.40 with a stop at 35.
Trade Idea 2: Buy the January 35 calls (offered at 91 cents late Friday) on the same trigger.
Trade Idea 3: Sell the January 31 Puts (20 cents) on the same trigger.
Trade Idea 4: Buy the January 31/35 bullish Risk Reversal (71 cents) combining trades 2 and 3, on the same trigger.
Trade Idea 5: buy the January 36/38/39 broken wing Call Butterfly (35 cents), buying the 36 and 39 strikes and selling 2 of the 38 strikes, on the same trigger.
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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 year sees is a positive tone in the price action of equities. That said Gold looks to continue lower while Crude Oil rises. The US Dollar Index seems content to move sideways with a downside bias while US Treasuries are biased lower. The Shanghai Composite and Emerging Markets are biased to the upside with risk of the Chinese market reversing. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, despite the moves lower to end the week. Use this information as you prepare for the coming week and trade’m well.
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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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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)