4 Trade Ideas for Mastercard: Bonus Idea

• Posted by Greg Harmon
• on March 14th, 2022

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

Mastercard, $MA, started last week with a full retracement to the December low and then bounced. It ended the week pulling back from building resistance near the 78.6% retracement of the range from the December low to the top in February. With the gap up and intraday move lower on Friday the stock could move in either direction this week. A break of resistance to the upside would look for continued reclamation toward the prior high with targets at the 38.2% retracement at 341.55 and the 61.8% retracement at 363.86.

Continued movement to the downside would give a target to 235 as a Measured Move equivalent from the top to last week’s low. The RSI has stalled as it moved higher out of oversold territory with the MACD leveling and negative. These would seem to favor more downside. There is support lower at 320 and 305.50 before 301.50 and 290 then 288 and 283 followed by 269. Resistance higher comes at 331 and 337 then 341 and 350 before 357 and 364. Short interest is low under 1%. The stock pays a dividend with an annual yield of 0.60% and will start trading ex-dividend on April 7th.

The company is expected to report earnings next on April 27th. The March options chain shows big open interest at every $5 strike on the put side from 300 to 370. It is much bigger on the call side though at 360 and then 370. The April options have open interest spread from 280 to 375 on the put side, biggest at 300. On the call side it builds from 315 to a peak at 370. The April 29 Expiry options have very small open interest as they have just recently opened, with the exception of a big chunk at the 365 call. The May chain shows biggest open interest at the 360 and 365put strikes and spread from 335 to 370 on the call side.

Mastercard, Ticker: $MA

Trade Idea 1: Sell the stock short on a move under 323 with a stop at 331.

Trade Idea 2: Sell the stock short on a move under 323 and add an April 330/350 Call Spread ($8.00) while selling an April 300 Put ($7.00).

Trade Idea 3: Buy the stock on a move over 331 with a stop at 324.

Trade Idea 4: Buy the stock on a move over 331 and add an April 320/300 Put Spread ($6.90) while selling the April 350 Calls ($5.30).

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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 heading into March options expiration, saw equity markets continue to show weakness in choppy trading. The coming week will likely be headline driven again with the Ukraine – Russia conflict and the FOMC meeting adding volatility.

Elsewhere look for Gold to continue its uptrend while Crude Oil pulls back in its uptrend. The US Dollar Index continues to move to the upside while US Treasuries pullback in their downtrend. The Shanghai Composite looks to have established a downtrend while Emerging Markets continue their move lower.

The Volatility Index looks to remain elevated making the path difficult for equity markets. Their charts look weak, especially the SPY and the QQQ on the longer timeframe. On the shorter timeframe both the QQQ and SPY are choppier. The IWM has held in consolidation on both timeframes, relative strength. 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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