Top Trade Ideas for the Week of March 3, 2014: Bonus Idea
- Posted by Greg Harmon
- on March 3rd, 2014
Here is your Bonus Idea with links to the full Top Ten:
Express Scripts, Ticker: $ESRX
Express Scripts, $ESRX, made a false breakout of a channel 2 weeks ago and then fell back. Now it is trying to break out higher again. The Measured Move higher targets 79.25 and that is reinforced as there is a Positive RSI Reversal in the chart targeting there as well. The Lower low in the Relative Strength Index (RSI) combined with the higher low in the price creates the Positive Reversal. That RSI running higher supports the upside and the MACD is flat, no longer falling. Resistance higher stands at 75.40 and 78.17 with support below at 73.75 and 72.75 before 70.
Trade Idea 1: Buy the stock on a move over 75.50 with a stop at 74.50.
Trade Idea 2: Buy the March 75 Calls (offered at $1.42 late Friday) and trade them like the stock trade (using the stock price as a trigger, stop and target).
Trade Idea 3: Buy the April 75/March 77.5 Call Diagonal ($1.81, buy April and sell March).
Trade Idea 4: Buy the March/April 77.50 Call Calendar (69 cents, buy April and sell March).
Trade Idea 5: Buy the April 72.5/77.50 bullish Risk Reversal (17 cents, buy the 77.50 Call and sell the 72.50 Put).
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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, turning the page of the calendar into March sees the equity markets again looking strong. Elsewhere look for Gold to consolidate or pullback in its uptrend while Crude Oil consolidates with an upward bias. The US Dollar Index looks in trouble and moving lower while US Treasuries are biased higher. The Shanghai Composite may get a short term bounce and Emerging Markets look to continue sideways with an upward bias. Volatility looks to remain low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts also look higher with the SPY and IWM stronger than the QQQ. 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.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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