4 Trade Ideas for Kraft Heinz: Bonus Idea

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

Kraft Heinz, $KHC, comes into the week consolidating in a descending triangle at resistance from May of last year. On a larger scale this consolidation is at a possible trigger for a greater than 3 year long Cup and Handle with a target to 70. The RSI is holding in the bullish zone with the MACD level and positive.

There is resistance at 44 and 44.65 then 47.80 and 50.50 before 54 and 56.75 then 58 and 60. Support lower comes at 43 and 42 before 41and 40.50. Short interest is low at 2.7%. The stock pays a dividend with an annual yield of 3.67% and will start trading ex-dividend on May 26th. The company is expected to report earnings next on August 2nd.

The May options chain shows biggest open interest at the 40 put and then at the 40, 42.50 and 45 strikes on the call side. The June chain is big at the 25 put and then builds to a peak at 35. On the call side is biggest at the 37.50 strike and tails to the 42.50 strike. In the July chain the 30 put has the largest open interest while it is spread from 40 to 45 on the call side. The October chain is biggest at the 35 and 30 puts, and from the 37.50 call up to the 47.50.

Kraft Heinz, Ticker: $KHC

Trade Idea 1: Buy the stock on a move over 44 with a stop at 41.50.

Trade Idea 2: Buy the stock on a move over 44 and add a June 42.50/37.50 Put Spread ($1.00) while selling an October 50 Call (70 cents).

Trade Idea 3: Buy the May/July 45 Call Calendar ($0.85) while selling the June 40 Put (50 cents).

Trade Idea 4: Buy the October 37.50/45/50 Call Spread Risk Reversal (45 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 the first week of May in the books, saw equity markets remain in downtrends.

Elsewhere look for Gold to pullback while Crude Oil may resume the uptrend. The US Dollar Index continues to the upside while US Treasuries trend lower. The Shanghai Composite looks to continue lower while Emerging Markets trend to the downside.

The Volatility Index looks to remain elevated making the path easier for equity markets to the downside. Their charts also look weak, especially on the longer timeframe. On the shorter timeframe both the QQQ and IWM are also weak and look better lower. The SPY sits at support though with a breakdown would join them lower. 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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