Top Trade Ideas for the Week of August 19, 2013: Bonus Idea
- Posted by Greg Harmon
- on August 19th, 2013
Here is your Bonus Idea with links to the full Top Ten:
Freeport McMoRan Copper & Gold, Ticker: $FCX
Freeport McMoRan Copper & Gold, $FCX, broke the falling trend line two weeks ago and is now consolidating that break at 32 in a bull flag, above the 200 day Simple Moving Average (SMA) and at prior resistance from December, March and April. A break over the top carries a Measured move (MM) to 35 with resistance at 34 along the way and a gap fill above at 35.75 before resistance at 37. Short interest has mellowed to only about 3.4%. The Relative Strength Index (RSI) is bullish and holding with a Moving Average Convergence Divergence indicator (MACD) that is rising. Both continue to support upward price action. Support lower is found at 31 and 30 followed by 28.80 and 27.90 before the double bottom at 26.
Trade Idea 1: Buy the stock on a move over 32.20 with a stop at 31.50.
Trade Idea 2: Buy the August23w 32 Calls (offered at 32 cents late Friday) on the same trigger, before Tuesday’s close.
Trade Idea 3: Buy the September 32 Calls (92 cents) on the same trigger.
Trade Idea 4: Buy the September 32/35 Call Spreads (78 cents) on the same trigger.
Trade Idea 5: Buy the October 32/35 Call Spreads (94 cents) on the same trigger.
Trade Idea 6: Buy the October 32/35 Call Spreads selling the October 28 Puts (46 cents) on the same trigger.
Trade Idea 7: Buy the October 32/35 Call Spreads selling the September/October 28 Put Calendars (66 cents) 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, starting the September options cycle sees the equity markets looking weak and heavy. Look for Gold to continue to rise in the downtrend while Crude Oil just chugs higher. The US Dollar Index seems poised to move lower along with US Treasuries. The Shanghai Composite and Emerging Markets are biased to continue to the downside with risk of the Emerging Markets consolidating first. Volatility looks to remain low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, but their charts suggest more pullback. The QQQ is the strongest of the bunch and may just consolidate. Use this information as you prepare for the coming week and trad’em well.
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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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