Top Trade Ideas for the Week of December 31, 2012: Bonus Idea
- Posted by Greg Harmon
- on December 31st, 2012
Here is your Bonus Idea with links to the full Top Ten:
Fifth Third Bancorp, Ticker: $FITB
Fifth Third Bancorp, $FITB, is building a bull flag between 14.85 and 15.15, after a rise since November. The Relative Strength Index (RSI) is on the verge of a move into bullish territory with a Moving Average Convergence Divergence indicator (MACD) that is positive, but starting to fade. There is resistance higher at 15.13 and a gap to 15.79 then higher at 16.05. The 3-box reversal Point and Figure chart (PnF) chart has a price objective of 24.50 higher. Support is found lower at 14.65 and 14.20 followed by 14 and 13.70.
Trade Idea 1: Buy the stock on a move over 15.15 with a stop at 14.95.
Trade Idea 2: Buy the January 15 Calls (offered at 47 cents late Friday) on a move over 15.15.
Trade Idea 3: Buy the February 15 Calls (66 cents) on a move over 15.15.
Trade Idea 4: Buy the February 15/16 Call Spreads (45 cents) on a move over 15.15.
Trade Idea 5: Sell the February 14 Puts (29 cents) on a move over 15.15.
Trade Idea 6: Buy the February 15/16 Call Spreads and sell the February 14 Puts (16 cents) on a move over 15.15.
Trade Idea 7: Buy the January/February 16 Call Calendar selling the January 14 Put (4 cents) on a move over 15.15.
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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 last day of 2012 approaches sees Gold continuing to look lower while Crude Oil shows an upside trend continuing. The US Dollar Index and US Treasuries seem content to move sideways with US Treasuries now biased higher and the Dollar Index lower. The Shanghai Composite and Emerging Markets are both biased to the upside with risk of Emerging Markets consolidating further first. Volatility has jumped and is looking to relatively higher than recently switching the bias for the equity index ETF’s SPY, IWM and QQQ, lower, with the QQQ looking the worst and IWM the strongest. 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)