4 Trade Ideas for Constellation Brands: Bonus Idea

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

Constellation Brands, $STZ, moved to the bottom of a range in August and held there for over 2 months. It started higher in October but ran out of gas as it made a higher high later that month. It pulled back to a higher low and bounced. It ended last week making a higher high again and pushing through resistance. The Bollinger Bands® are opening higher with the RSI rising in the bullish zone and the MACD positive and climbing.

There is resistance at 228 and 229.50 then 235.50 before 240.50 and 242.50. Support lower comes at 222 and 219 then 215 and 209.25. Short interest is low at 1.6%. The stock pays a dividend with an annual yield of 1.37% and started trading ex-dividend on November 4th. The company is expected to report earnings next on December 1st.

The November options chain shows the biggest open interest at 215 and 210 on the put side but at 225 then 220 on the call side. The December 3 Expiry chain shows an expected move of about $10 but little open interest yet. The December chain shows big open interest at 200 and 195 on the put side and at 230 and 235 on the call side.

Constellation Brands, Ticker: $STZ

Trade Idea 1: Buy the stock on a move over 223 with a stop at 219.

Trade Idea 2: Buy the stock on a move over 223 and add a November 220/215 Put Spread ($1.35) and sell the December 3 Expiry 230 Calls ($1.45).

Trade Idea 3: Buy the November/December 225 Call Calendar ($2.80) and sell the December 3 Expiry 215 Puts ($1.80).

Trade Idea 4: Buy the December 210/225/235 Call Spread Risk Reversal ($1.50).

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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 first week of November in the books, saw equity markets showed great strength with all major indexes finishing at all-time highs.

Elsewhere look for Gold to continue a short term uptrend while Crude Oil pulls back in its uptrend. The US Dollar Index continues on the verge of a reversal higher while US Treasuries continue in a short term uptrend. The Shanghai Composite looks to consolidate while Emerging Markets consolidate over long term support.

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 printed possible reversal candles and both are extended. The IWM takes the lead though as it broke a 9 month consolidation higher. 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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