4 Trade Ideas for Nasdaq: Bonus Idea

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

Nasdaq, $NDAQ, ran from the pandemic low to a top in November before stalling out. It consolidated at the top through November and December before pulling back into the New Year. Friday it closed under the 200 day SMA for the first time since April 2020. It also printed a Hammer candle, a possible reversal, if confirmed higher Tuesday. The RSI is deep into bearish territory with the MACD negative and falling.

The Bollinger Bands® are opened lower. There is support at 184 and 180 then 175.50 and 168. Resistance higher sits at 188 and 194.50 then 200 and 207. Short interest is low at 2%. The stock pays a dividend with an annual yield of 1.16% and has traded ex-dividend since December 2nd. The company is expected to report earnings next on January 26th.

The January options chain shows open interest biggest at the 200 strike on the put side and at 210 on the call side. In February it is biggest at the 190 and 180 put strikes, and at the 210 call strike. March options are spread on the put side, but on the call side the biggest open interest is at the 220 strike.

Nasdaq, Ticker: $NDAQ

Trade Idea 1: Buy the stock on a move over 187 with a stop at 185.

Trade Idea 2: Buy the January/February 190 Call Calendar ($3.85) while selling the February 170 Puts ($1.25).

Trade Idea 3: Buy the February 170/190/200 Call Spread Risk Reversal ($2.10).

Trade Idea 4: Buy the February 180/175-170 1×2 Put Spread (95 cents) on a move under 183.

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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 a short week and January options expiration, saw equity markets showing early promise but failing to hold the early week gains.

Elsewhere look for Gold to continue its rise in consolidation while Crude Oil drives higher. The US Dollar Index continues a pullback in the uptrend while US Treasuries pullback in a consolidation range. The Shanghai Composite looks to pullback in consolidation while Emerging Markets bounce in the downtrend.

The Volatility Index looks to remain in the normal range taking the pressure off equity markets. Their charts continue to show strength in the longer timeframe but with short term weakness. The IWM and QQQ look the weakest on the short timeframe with the SPY faring slightly better. 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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