4 Trades to Book a Trip Higher in Ctrip.com: Bonus Idea

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

Ctrip, $CTRP, has been moving higher since coming out of a base in February. Then it pushed over the 50 and 20 day SMA’s and started up. The first resistance came later that month and it consolidated sideways until price ran into the 50 day SMA again. Then it moved higher again in April to a top in June. Another pullback to the 50 day SMA and it started higher again in July. Now it is at the June high and looking ripe for another flight higher.

The RSI is in the bullish zone to support more upside price action. The MACD is also rising and positive to support higher prices. The Bollinger Bands® are opened to the upside as well. A Measured Move higher would give a target to 63.25 on the next leg. There is resistance at 58.50 and then free air above. Support lower sits at 56.50 and 55.40 followed by 53.20 and 52. Short interest is elevated at 7% and the company is expected to report earnings next on August 9th.

The options chains show open interest focused at 56 this week. Next week it is biggest at 57 on the Put side. The August 11th chain, the first after the earnings report, is light but has biggest open interest at the 57 Call strike. The August monthly chain also has biggest open interest below at the 55 strike, but some size at 60 on the call side as well. Finally the September chain has biggest open interest at the 50 Put strike. Takeaway: options traders are surprised it is trading this high.

Ctrip, Ticker: $CTRP

Trade Idea 1: Buy the stock on a move over 58.50 with a stop at 56.

Trade Idea 2: Buy the stock on a move over 58.50 with a August 11 Expiry 58/55 Put Spread ($1.50) for protection through earnings and selling an August 60 Call ($1.05) to fund most of the cost of protection.

Trade Idea 3: Buy the September 55/60 bullish Risk Reversal (60 cents).

Trade Idea 4: Buy the August 4 Expiry/August 60 Call Calendar (90 cents) and sell the August 4 Expiry 56.50 Put (65 cents) to lower the cost.

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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 July Options Expiry and 1 full week of earnings behind them, sees the Index ETF’s looking strong and ready to move higher.

Elsewhere look for Gold to continue in its uptrend while Crude Oil pulls back lower in the short run within the longer term drift higher. The US Dollar Index continues to weaken and move lower while US Treasuries strengthen and move higher. The Shanghai Composite continues to drift up while Emerging Markets move higher with strength.

Volatility looks to remain at extremely low levels keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. In the short run their charts look to consolidate or pullback but all look strong and ready to continue higher in the longer timeframe. 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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