Four trades for a break out in Chevron: Bonus Idea

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

Chevron, $CVX, made a high under 120 at the start of the year. It pulled back from there, finding support at the beginning of June. It has consolidated in a sideways channel since April, with a push over the top last week that failed. Another view sees it breaking the falling trend resistance last week as well. Price also moved over the 200 day SMA and has held.

A Measured Move higher over the channel would give a target to 117. The RSI is bullish and strong with the MACD rising. There is resistance from 110-111 and then at 114,50 and 117.50 before 119. Support lower comes at 108.50 and 106.50 then 103. Short interest is low at 1.2%. The stock goes ex-dividend August 16th and is expected to report earnings October 27th.

The August options chain shows largest open interest at 105 and 119. In September the put side is large at 195 and the calls big from 105 to 115. In October it is building still and in December it is biggest at 100 and 105 on the put side and from 105 to 115 on the call side.

Chevron, Ticker: $CVX

Trade Idea 1: Buy the stock on a move over 111 with a stop at 108.50.

Trade Idea 2: Buy the stock on a move over 111 and add a September 110/105 Put Spread ($1.60) and sell the October 115 Calls (87 cents) to lower the cost of protection.

Trade Idea 3: Buy the October 100/115 bull Risk Reversal (31 cents).

Trade Idea 4: Buy the September/October 115 Call Calendar (70 cents) and sell the September 105 Puts (82 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 heading into the first full week of August sees the equity markets are settling and marking time near their highs.

Elsewhere Gold looks to pause or pullback while Crude Oil pauses with a bias higher. The US Dollar Index is slowing in its descent while US Treasuries are broadly consolidating. The Shanghai Composite looks to continue in its uptrend while Emerging Markets pause in their uptrend.

Volatility looks to remain at very low levels keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts show consolidation in the SPY and QQQ with a pullback in the the rising channel for the IWM. 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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