4 Trade Ideas for Aflac: Bonus Idea

• Posted by Greg Harmon
• on May 13th, 2024

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

Aflac, $AFL, comes into the week at resistance and an all-time high closing price. It has Bollinger Bands® opening higher with the RSI in the bullish zone and then MACD positive and climbing. There is no resistance above 86.25. Support lower is at 85.25 and 84.25 then 83.25. Short interest is low at 2.5%. The stock pays a dividend with an annual yield of 2.32% and will begin trading ex-dividend on May 21st.

The company is expected to report earnings next on July 30th. The May options chain shows biggest open interest at the 85 strike on the put side and at the 82.50 and 85 strikes on the call side. The June chain is biggest at the 72.50 put strike and the 87.50 call. In the August chain there a small amount of open interest spread from 85 to 70 on the put side and a sizable slug at the 95 call.

Aflac, Ticker: $AFL

Trade Idea 1: Buy the stock on a move over 86.25 with a stop at 83.

Trade Idea 2: Buy the stock on a move over 86.25 and add a June 85 Put ($1.15) while selling the August 92.50 Call (80 cents).

Trade Idea 3: Buy the June/August 90 Call Calendar ($1.50) and sell the June 82.50 Put (40 cents).

Trade Idea 4: Buy the August 82.50/87.50/95 Call Spread Risk Reversal (95 cents).

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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 heading into the May options expiration, saw equity markets showed renewed strength with a rebound from pullback.

Elsewhere look for Gold to continue pause in its uptrend while Crude Oil consolidates in the pullback. The US Dollar Index continues to pullback in the 6 month uptrend while US Treasuries continue their downtrend. The Shanghai Composite looks to continue the short term move higher while Emerging Markets flirt with a break out of a long channel to the upside.

The Volatility Index looks to remain very low and stable making the path easier for equity markets to the upside. The charts of the SPY and QQQ look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY continue to move higher toward new highs as well. The IWM looks good on the shorter timeframe but the longer timeframe continues to need more time. 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.

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