4 Trade Ideas for Bristol-Myers: Bonus Idea

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

Bristol-Myers Squibb, $BMY, comes into the week looking to reverse higher. It has trended lower since a double top printed at the end of last year. As it bottomed just over a week ago it printed very large volume, the highest in 18 months, a possible capitulation. Friday the move higher signaled a tradeable bottom. The RSI is rising out of oversold territory with the MACD curling toward a cross up. There is resistance at 54 and 56 then 57.50 and 58.50 before 59.75. There is support at 52 and no interest in holding this if it falls below 50.75. Short interest is low at 1.3%. The stock pays a dividend with an annual yield of 4.32% and has traded ex-dividend since October 5th.

The company is expected to report earnings next on February 2, 2024. The November options chain has biggest open interest at the 55 and 57.50 put strikes above and at the 57.50 call. In the December chain small open interest is spread from 65 to 50 on the put side and moderate size is found at the 52.50 and 55 call strikes. The January chain has biggest open interest at the 57.50 and then 65 put strikes and at the 80 and 82.50 calls. Finally, the March chain shows biggest open interest at the 50 then 45 put, and the 60 then 725 and 62.50 calls.

Bristol-Myers Squibb, Ticker: $BMY

Trade Idea 1: Buy the stock on a move over 53.25 with a stop at 50.75.

Trade Idea 2: Buy the stock on a move over 53.25 and add a November 52.50 Put (59 cents) while selling the March 60 Call (57 cents).

Trade Idea 3: Buy the December/January 57.50 Call Calendar (27 cents) and sell the December 50 Put (37 cents).

Trade Idea 4: Buy the March 45/55/60 Call Spread Risk Reversal (85 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 with just 2 months left in the year, saw equity markets showing strength with a strong rebound after a weak October.

Elsewhere look for Gold to continue to consolidate at the highs while Crude Oil enters a short term downtrend. The US Dollar Index is in a possible reversal lower while US Treasuries bounce in their downtrend. The Shanghai Composite and Emerging Markets both look to continue their bounces in their downtrends.

The Volatility Index looks to remain low after a sharp reversal making the path easier for equity markets to the upside. Their charts also look strong, especially on the shorter timeframe with strong volume breakaway moves higher. On the longer timeframe both the QQQ and SPY are on the cusp of reversals while the IWM also looks strong. 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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