5 Trade ideas for the next move in Prudential: Bonus Idea

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

Prudential Financial, $PRU, moved higher following the election last fall. By early December though it had stalled and started to move sideways. That continued in a tight range for 2 and a half months until a push higher. It topped again at the end of February and pulled back to the same support area. This would be the range for the next 5 months until a break below 2 weeks ago. It was a minor break down, and has come back to retest the break level Friday. From here we look for a push back into the range and towards the top or a reversal to head lower towards 84.

Momentum looks to be turning back up with the RSI rising off of the oversold level and the MACD turning toward a cross up. These would support a move higher. There is resistance at 103 and 105.50 followed by 109.65 and the top of the channel at 115.20. Support lower sits at 101 and 99.25 followed by 96 and 89.40 before 85.50 and 82.75. Short interest is low at 1.2% and the company is expected to report earnings next November 1st.

The September options chain shows open interest on the put side from 95 to 110. But the sum total of that is less than half of the open interest at the 115 strike on the call side. October options are still building and have little open interest. The December chain, the first after the next earnings report, show small open interest on the put side centered on the 105 strike, and spread from 110 to 120 on the call side.

Prudential Financial, Ticker: $PRU

Trade Idea 1: Buy the stock on a move over 103 with a stop at 100.50

Trade Idea 2: Buy the stock on a move over 103 and add a September 100 Put (83 cents) for protection, selling the October 110 Call (73 cents) to pay for most of it.

Trade Idea 3: Buy the October 92/110 bull Risk Reversal (free).

Trade Idea 4: Sell the stock short on a move under 101 with a stop at 103.50.

Trade Idea 5: Buy the October 100 Put ($2.09) on a move under 101.

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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 Jackson Hole behind and looking ahead to the Labor Day weekend at the end of next week saw the equity markets improved, but still lacking strength.

Elsewhere look for Gold to consolidate at 1300 in its uptrend while Crude Oil drifts higher slowly. The US Dollar Index remains weak and better to the downside while US Treasuries are biased to continue higher. The Shanghai Composite looks to continue higher after a big break out and Emerging Markets are better to the upside working through long term resistance.

Volatility looks to remain low putting the bias back higher for the equity index ETF’s SPY, IWM and QQQ. Their charts are all looking good on the longer timeframe but mixed in the shorter timeframe. The QQQ is the strongest and is consolidating, while the SPY continues to be at some risk for further pullback, and the IWM is reversing but the weakest, under its 200 day SMA. 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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