4 Trade Ideas for Berkshire Hathaway: Bonus Idea

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

Berkshire Hathaway, $BRK.B, comes into the week breaking the 20 day SMA and short term resistance as it fills the gap from April 4. This after bouncing off the 200 day SMA to start last week. The RSI is rising back to the bullish zone with the MACD positive and turning back up. There is resistance above at 529.50 and 539, the all-time high. Support lower is from 521.50 to 519.75 then 510 and 489. Short interest is low at 1.2%. The stock does not pay a dividend.

The company is expected to report earnings next on May 2nd. The April options chain shows biggest open interest at the 500 strike on the put side and from 535 to 550 on the call side. In the May 2 Expiry chain the at-the-money straddles shows a 30.50 move expected between now and then, or a range of 493.50 to 554.50. The May chain has biggest open interest at the 490 put and the 535 call strikes. Finally, the June calls have big open interest from 500 to 480 on the put side and spread from 480 to 550.

Berkshire Hathaway, Ticker: $BRK.B

Trade Idea 1: Buy the stock on a move over 527 with a stop at 507.

Trade Idea 2: Buy the stock on a move over 527 and add a May 520/490 Put Spread ($8.70) while selling the June 565 Calls ($7.55).

Trade Idea 3: Buy the April 25 Expiry/May 540 Call Calendar ($6.90) while selling the May 480 Puts ($6.90).

Trade Idea 4: Buy June 480/530/550 Call Spread Risk Reversal (50 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 heading into the holiday shorted pre-Easter week, saw equity markets show resilience with a sizeable move higher in a very volatile week.

Elsewhere look for Gold to continue its move higher while Crude Oil continues the downtrend. The US Dollar Index continues to trend to the downside while US Treasuries trend lower. The Shanghai Composite consolidation looks at risk to a move lower while Emerging Markets consolidate.

The Volatility Index looks to remain at extreme levels making the path easier for equity markets to the downside. Their charts continue to look at risk for more downside, especially on the shorter timeframe. On the longer timeframe both the QQQ and SPY printed reversal patterns if confirmed next week. The IWM has a bit more work to do in the longer timeframe to join them. Use this information as you prepare for the coming week and trad’em 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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