4 Trades to charge higher in Visa: Bonus Idea

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

Visa, $V, went through a minor consolidation from March into April and then started higher off of its 50 day SMA. It has moved up against rising trend resistance ever since. And that 50 day SMA has acted as support along the way higher. In trends like this one there are generally two good entry points. The first is on a move off of support. The second is upon making a new high after a pullback. It is the latter that is in play now.

The RSI is in the bullish zone and moving back higher after making a lower low, while price made a higher low. This sets up a Positive RSI Reversal with a target to 115.75. The MACD is curling up towards a cross and remains positive. Also the Bollinger Bands® have squeezed in and are now opening higher. There is no resistance above 112.75. Support lower comes at 110 and 109 then 107. Short interest is elevated at 6.6%. The company is expected to report earnings next on January 31st.

The December options chain shows large concentrations of open interest at the 110 and 105 strikes on the put side. It is bigger at the 115 call strike and 110 strike. In January the biggest open interest on the put side is at the 90 strike. But that is dwarfed by the 6 times the open interest at the 110 and 120 strikes on the call side. The February options, the first available that cover the next earnings report, are building but largest at the 125 call strike then the 110 and 115 calls.

Visa, Ticker: $V

Trade Idea 1: Buy the stock on a move over 112.75 with a stop at 110.

Trade Idea 2: Buy the stock and add a December 110/105 Put Spread (63 cents). Sell a December 115 Call (35 cents) to lower the cost.

Trade Idea 3: Buy a January 110/120 Call Spread ($3.78) and sell the December 29 Expiry 108 Puts (53 cents) to lower the cost.

Trade Idea 4: Buy a January 110/115 bullish Risk Reversal (19 cent credit).

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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 Thanksgiving behind and the holiday season is in full swing, usually meaning light trading for equity markets. But light or not, equities come into the season ready to party and looking strong.

Elsewhere look for Gold to consolidate marking time while Crude Oil continues its move higher. The US Dollar Index is renewing its downtrend while US Treasuries are drifting higher, trying to make a new high. The Shanghai Composite is pausing while Emerging Markets are renewing their trend higher.

Volatility is back to very low levels keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts all look strong on the weekly timeframe. On the daily frame though the SPY appears to be strongest with the QQQ at some resistance and the IWM consolidating. Despite the moves higher, 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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