Top Trade Ideas for the Week of August 11, 2014: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Qualcomm, Ticker: $QCOM

Qualcomm, $QCOM, had a long run higher from the July 2013 bottom near 59 to the top just a couple of weeks ago at 81.87. Since then it has pulled back just over 38.2% of that move up and finding support at 72, which has been support previously. Friday’s move back higher suggests the pullback may be over and gives a possible trade. There is resistance higher at 74.20 and 75.85 followed by 77.80 and 80.70 before the prior top. Over that and an AB=CD pattern would target 84.50. Support lower comes at 72 and then 70.20.

Trade idea 1: Buy the stock now (over 72) with a stop at 71.50.

Trade Idea 2: Buy the stock on a move over 74.20 with a stop at 72.75.

Trade Idea 3: Buy the August 74 Calls (offered at 65 cents late Friday) on a move over 74.20.

Trade Idea 4: Buy the August 73/74 bull Risk Reversal (32 cents).

Trade Idea 5: Buy the September 12 Expiry 74 Calls ($1.45) and sell the August 75 Calls (24 cents), with a plan to sell weekly Calls each week against the September Calls to reduce the basis of the trade.

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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 next week sees the equity markets still looking a bit shaky, but better than last week. Elsewhere look for Gold to continue to consolidate with an upward bias while Crude Oil consolidates with a downward bias. The US Dollar Index and US Treasuries look set to consolidate with an upward bias. The Shanghai Composite is also consolidating with an upward bias, while Emerging Markets are biased to the downside as they struggle at resistance. Volatility looks to remain low but with an upward bias keeping the bias flat to slightly lower for the equity index ETF’s SPY, IWM and QQQ. Their charts show that the IWM is strongest again and showing the strongest signs of a reversal while the SPY and QQQ look as if they could continue to consolidate in their long term uptrends. 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.

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