4 Trade Ideas for The Bank of New York Mellon: Bonus Idea

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

The Bank of New York Mellon, $BNY, comes into the week approaching resistance. It moved up last week off of the 20 day SMA. It has a RSI in the bullish zone with the MACD positive after resetting lower. There is no resistance above 148. Support comes at 143.50 and 139.50. Short interest is low at 1.5%. The stock pays a dividend with an annual yield of 1.45% and has traded ex-dividend since April 27th.

The company is expected to report earnings next the morning of July 15th. The July options chain shows biggest open interest at both the 145 and 140 strikes on the put side and at the 140 and 150 strikes on the call side.  The August chain has biggest open interest at the 130 strike put and the 155 strike call. The September chain as biggest open interest at the 120 then 115 strike puts and on the call side at 155 then 150 and 140.

The Bank of New York Mellon, Ticker: $BNY

Trade Idea 1: Buy the stock on a move over 148 with a stop at 143.

Trade Idea 2: Buy the stock on a move over 148 and add a July 145/140 Put Spread ($2.40) while also selling the September 160 Calls ($1.95).

Trade Idea 3: Buy the July/August 150 Call Calendar ($3.45) while selling the July 140 Puts ($1.50).

Trade Idea 4: Buy the September 135/150/165 Call Spread Risk Reversal ($1.80).

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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 with the month of June and its non-farm payroll report in the rearview mirror, saw the high correlation of the equity market indexes may be starting to disconnect.

Elsewhere, look for Gold to continue a short term downtrend along with Crude Oil extending its downtrend. The US Dollar Index looks to continue flirt with a break of the 15 month range and morphing into an uptrend while US Treasuries continue to hold over support in consolidation. The Shanghai Composite looks to continue the consolidation in a slow drifting range higher while Emerging Markets pause and digest after a long run of new highs in their uptrend.

The Volatility Index looks to continue in the normal zone keeping at least a slight tailwind behind equities. Despite this the broad indexes have gone nowhere on the week. The charts of the SPY, the QQQ and the IWM continue to look strong on the longer timeframe with the IWM leading and the SPY and QQQ consolidating. On the shorter timeframe the SPY and the QQQ still have some work left in the short term bounce to prove the pullback is over. Making a new all-time high, or at least a move over the June high, with higher momentum readings would solidify that. The IWM, however, is looking strong, after making a new all-time high Tuesday. Use this information as you prepare for the coming week and trad’em well.