Top Trade Ideas for the Week of January 30, 2012: Bonus Idea

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

Celgene, Ticker: $CELG

Celgene, $CELG, is consolidating in a bull flag between 72.25 and 74. It has a bullish Relative Strength Index (RSI) at 64 but the Moving Average Convergence Divergence (MACD) indicator is crossing negative. This happens often in a flag. A break above the flag has a Measured Move to 80. A fall below 72.25 finds support at 68.30 and 67 followed by 65.30. The chart is biased to the upside.

Trade Idea 1: Buy the stock on a move over 74 with a $1.50 trailing stop.
Take off 1/3 on a touch at the Measured Move at 80 and tighten the stop to a 1% trailing stop.

Trade Idea 2: Buy the February 75 Calls.
Use the same stop and profit targets as the stock trade. These were offered at 85 cents late Friday.

Trade Idea 3: Sell the February 67.5 Puts.
Use the same stop as the stock trade, expecting them to expire worthless. These were bid at 20 cents late Friday.

Trade Idea 4: Sell the March 67.5 Puts.
Use the same stop as the stock trade, expecting them to expire worthless. These were bid at 74 cents late Friday.

Trade Idea 5: Buy the February 75 Calls and sell the March 67.5 Puts.
This creates a bullish spread Risk Reversal and was offered at 11 cents late Friday.

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After reviewing over 900 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 January is closing out, the coming week looks to bring more upside for Gold and further consolidation within the broad 93 – 103.83 range for Crude Oil. The US Dollar Index looks to continue lower while US Treasuries consolidate after probing lower. The Shanghai Composite and Emerging Markets are biased to the upside after China taking the week off. Volatility looks to continue to slowly move lower toward support. These influencers create a positive environment for the US equity index ETF’s SPY, IWM and QQQ, and their charts are all pointing to higher levels. A strong move by China lower could change this picture or as sharp move higher by the US Dollar Index. Use this information as you prepare for the coming week and trade’m 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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