4 Trade Ideas for Kraft Heinz: Bonus Idea

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

Kraft Heinz, $KHC, started moving higher in March. It continued higher until finding resistance in the range that the stock traded for 2 months before turning lower in January. It consolidated there for 6 weeks before pushing to a new high in early June. Since then it has retested the prior resistance as support twice, closing there Friday on a strong down day.

The RSI is falling faster and making a new low below the mid line and nearing a switch to the bearish zone. The MACD is dropping toward the zero line. There is support here at 30.75 and then lower at 30.10 and 29.50 before 28.40, near the 38.2% retracement of the move higher, and 27.40 then 26.60 and 25.35, the 61.8% retracement. Resistance above comes at 31.25 and 32.40 before 33.70 and 34. Short interest is moderate at 5.5%. The stock pays a dividend with an annual yield of 5.18% and started trading ex-dividend on May 28th. The company is expected to report earnings next on August 6th.

The July options chain shows the largest open interest at the 25 strike with big numbers also at 30, 27.50, and then 32.50. On the call side it is much bigger and highest at 32.50 then 35. The August 7 Expiry, covering the earnings date, is just starting to trade. But the August monthly options show big open interest from 27.50 to 32.50 on the put side and smaller size from 32.50 to 37.50 on the call side.

Kraft Heinz, Ticker: $KHC

Trade Idea 1: Sell the stock short on a move under 30.50 with a stop at 31.50.

Trade Idea 2: Sell the stock short on a move under 30.50 and buy a July 31 Call ($1.07) as a hedge.

Trade Idea 3: Buy the July 30 Put and sell the August 27.50 Put (4 cents).

Trade Idea 4: Buy the August 30/27.50/25 Put Butterfly (74 cents).

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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 with just 2 trading days left in the first half of the year saw profit taking in equity markets and possibly more damaging activity.

Elsewhere look for Gold to possibly continue its move higher while Crude Oil consolidates in the uptrend. The US Dollar Index continues to drift in sideways motion while US Treasuries move higher in their consolidation. The Shanghai Composite looks to continue to mark time as well along with Emerging Markets.

The Volatility Index looks to remain elevated and in consolidation keeping pressure on equity markets. Their charts are resetting lower, but currently without much damage on the short time frame. The longer timeframe is slightly better, but showing upper shadows for a possible retrench. Next week could give some clarity after the quarter ends. Use this information as you prepare for the coming week and trad’em well.

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.

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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