Top Trade Ideas for the Week of August 27, 2012: The Rest

Here are the Rest of the Top 10:

Express Scripts, Ticker: $ESRX

Express Scripts, $ESRX, is rolling higher after a small pullback following the gap up. The chart resembles a bull flag. A move over 63 triggers a Measured Move higher to 67.10. The rising and bullish Relative Strength Index (RSI) and Moving Average Convergence Divergence indicator (MACD) that is about to cross back to positive again support more upside. So does the 3-box reversal Point and Figure chart (PnF) which has a price objective of 76.

Flowserve, Ticker: $FLS

Flowserve, $FLS, is building a bull flag between 126.50 and 130. The Measured Move higher on a break out is to 150. That coincides nicely with the PnF price objective at 151. Short interest over 5% is elevated and may help it move higher. The RSI is bullish but the MACD has crossed to negative, not uncommon in a flag, but raises caution.

Illinois Tool Works, Ticker: $ITW

Illinois Tool Works, $ITW, broke above resistance at 57.70 and pulled back about 50% before finding a bottom. Now rising it has a Measured Move higher to 60.70 and then on to 66. The PnF has a price objective above that at 81 and the bullish RSI and positive MACD both support further upside.

Mylan, Ticker: $MYL

Mylan, $MYL, has moved through a rounded pullback and is back at resistance at 23.90. It has support for a move higher from a bullish and rising RSI and a MACD that although negative, is now rising. A break over 23.90 has a Measured Move higher to 27.40 and the PnF price objective at 34.50 is above that. Short interest at about 7% could fuel a move up as well.

Prudential Financial, Ticker: $PRU

Prudential Financial, $PRU, is also building a bull flag between 53.40 and 55. A Measured Move higher takes it to 61.60. The bullish and rising RSI supports such a move but the MACD is crossing negative. Wait for the break out. When it does the PnF has a price objective higher to 76.

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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 Saturday which, as the last week of unofficial Summer begins looks for Gold and Crude Oil to continue higher with a chance of consolidation for either. The US Dollar Index seems biased lower in the uptrend while US Treasuries may move in a tight range. The Shanghai Composite looks lower still and Emerging Markets looking like consolidation or small pullback within the uptrend. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The whole picture, except for some risk that Treasuries pop higher, sets up positive for equities. The charts of the Index ETF’s are not so certain though. The SPY and QQQ both look much better to the upside especially in the longer timeframe but the IWM seems more comfortable in a range for the time being with an upward bias. Use this information as you prepare for the coming week and trade’m 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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