Top Trade Ideas for the Week of July 22, 2013: Bonus Idea

• Posted by Greg Harmon
• on July 22nd, 2013

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

Keycorp, Ticker: $KEY

Keycorp, $KEY, consolidated in a very long and loose Rising Three Methods pattern between 11.50 and 12. It is now on the verge of breaking that higher with support of a rising and bullish Relative Strength Index (RSI) and a Moving Average Convergence Divergence indicator (MACD) that is turning back higher after avoiding a cross down. There is no resistance over 12.15 until 13.60 and 15.10 from 2008. Support lower comes at 11.50 and 11 followed by 10.50 and 10.25. The Measured Move higher takes it to 13.50.

Trade Idea 1: Buy the stock on a move over 12.15.

Trade Idea 2: Buy the August 12 Calls (offered at 30 cents late Friday) on a move over 12.15.

Trade Idea 3: Buy the August 12 bullish Risk Reversal (4 cents) on a move over 12.15.

Trade Idea 4: Buy the September 12 Risk Reversal (1 cent) on a move over 12.15.

Trade Idea 5: Buy the September 11/13 Risk Reversal (3 cents) on a move over 12.15.

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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, closing the books on the July options cycle and moving in to August the markets are making new highs but looking a bit overdone. Look for Gold to continue the bounce in its downtrend while Crude Oil continues higher. The US Dollar Index looks lower or may consolidate while US Treasuries are bouncing in their downtrend. The Shanghai Composite looks weak again and headed lower as Emerging Markets are biased to the downside in their bounce in the downtrend. Volatility looks to remain low and biased lower keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, despite the moves higher last week. Their charts are also biased to the upside in the mid term with the QQQ looking lower in the short term while the SPY and IWM could stand to consolidate their moves. Use this information as you prepare for the coming week and trad’em well.

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