4 Trade Ideas for Bristol Myers Squibb: Bonus Idea

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

Bristol Myers Squibb, $BMY, started a pullback in August. It continued through to early October when it shifted into consolidation. Last week the lower of the Bollinger Bands® shifted from falling to flat. The RSI has moved from falling to rising and the MACD has crossed up and is rising toward positive. With all the indicators reversing higher it is time to start watching for price to do the same.

There is resistance at 58.60 and 59.35 then 60.25 and 61.75 before 62.75 and 64. Support lower comes at 57.50 and 56.40. Short interest is low under 1%. The stock pays a dividend with an annual yield of 3.36% and has been trading ex-dividend since September 30th. The company is expected to report earnings next on February 4th. The November options chain has biggest open interest at the 60, 57.50 and 55 put strikes and then at the 58 and 60 calls.

In December it is biggest at the 60 put and equal at the 60, 65 and 70 calls. In January open interest is spread from 70 to 50 on the put side and builds from 60 to 70 on the call side. Finally, the March chain, covering the earnings report, has open interest spread from 60 to 50 on the put side but focused at 62.50 and 60 on the call side.

Bristol Myers Squibb, Ticker: $BMY

Trade Idea 1: Buy the stock on a move over 58.60 with a stop at 57.60.

Trade Idea 2: Buy the stock on a move over 58.60 and add a November 58/56 Put Spread (80 cents) while selling the January 62.50 Call (90 cents).

Trade Idea 3: Buy the November/January 60 Call Calendar ($1.15) while selling the January 55 Puts ($1.30).

Trade Idea 4: Buy the March 55/60/67.50 Call Spread Risk Reversal (5 cent credit).

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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 two months left in the year, saw equity markets were showing renewed strength with a rebound from an ugly 3rd quarter reaching new all-time highs.

Elsewhere look for Gold to continue to consolidate while Crude Oil continues to the upside. The US Dollar Index continues to drift to the upside at the edge of confirming a reversal while US Treasuries rebound to a short term uptrend. The Shanghai Composite looks to continue to mark time while Emerging Markets try to hold at support in a downtrend.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY are also very strong. The IWM just keeps refusing to play though, moving sideways in what is now a 9 month consolidation. 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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