Top Trade Ideas for the Week of January 13, 2014: Bonus Idea
- Posted by Greg Harmon
- on January 13th, 2014
Here is your Bonus Idea with links to the full Top Ten:
Prudential Financial, Ticker: $PRU
Prudential Financial, $PRU, broke the ascending triangle higher in November. It moved halfway to the pattern target and consolidated in a channel before reaching the target at 92.50 in December. Since then it has pulled back to the prior support and is now getting a lift from the 20 day Simple Moving Average (SMA). Continuation higher targets 95 initially with 100 not far beyond. The Relative Strength Index (RSI) remains bullish but needs to turn higher while the MACD is leveling at prior support. There is no resistance over 92.50 and support lower may be found at 90.25 and 87.75 before 82.80-83.25.
Trade Idea 1: Enter long on a move over 91.50 with a stop at 89.75.
Trade Idea 2: Buy the February 90 Calls (offered at $3.10 late Friday) on the same trigger.
Trade Idea 3: Buy the February 90/95 Call Spread ($2.16) on the same trigger.
Trade Idea 4: Buy the February/March 95 Call Calendars (58 cents) on the same trigger.
Trade Idea 5: Buy the February/March 95 Call Calendars and sell the February 82.5 Puts (free) 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 Friday which, heading into the first Options Expiration of the year sees the equity markets have survived a scare but look mixed. Next week look for Gold and Crude Oil to bounce in their downtrends. The US Dollar Index is now biased lower while US Treasuries are biased higher in the short run. The Shanghai Composite and Emerging Markets are biased to the downside with risk of the Emerging Markets bouncing higher. Volatility looks to remain subdued and biased lower keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts are decidedly mixed though with the IWM looking strongest and better to the upside, while the SPY looks a bit more fragile but still better higher and the QQQ the worst and looking sideways. Use this information as you prepare for the coming week and trad’em well.
Don’t forget to download A Longer Perspective, my take on 12 broad markets, while it is still free.
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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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