4 Trade Ideas for Pfizer: Bonus Idea

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

Pfizer, $PFE, gapped down in July and continued to a low in early August. Since then though it has made a series of higher highs and higher lows. Three weeks ago it made another higher high at the 200 day SMA and just under the gap. It has moved sideways in consolidation ever since. It ended last week pushing over the 200 day SMA in consolidation with a relatively big body candle and in a market moving the opposite direction.

The RSI is rising into the bullish zone with the MACD turning to cross up and positive. The Bollinger Bands® are also guiding higher. There is resistance at 39.65 and 40.25 then a gap to fill to 41.50 and 42.35 above that followed by 43.30 and 44.45. Support lower comes at 38.75 and 37.90 then 37 and 36.50. Short interest is low at 1.1%. The company is expected to report earnings next on January 28th. The stock pays a dividend with an annual yield of 3.85% and it will begin trading ex-dividend January 30th.

The January 31 Expiry options chain, covering the earnings report, shows the biggest open interest at the 40 call strike, with smaller size spread from 37.50 to 39 on the put side. The February options show open interest focused at 40 on the call side and from 37 to 39 on the put side. Finally the March options have been open the longest and have the biggest open interest. It is focused from 39 to 42 on the call side and smaller and spread from 32 to 39 on the put side.

Pfizer, Ticker: $PFE

Trade Idea 1: Buy the stock on a move over 39.75 with a stop at 38.70.

Trade Idea 2: Buy the stock on a move over 39.75 and add a January 31 Expiry 39/37.50 Put Spread (45 cents) while selling the March 41 Calls (45 cents) to pay for it.

Trade Idea 3: Buy the January 24 Expiry/March 40 Call Calendar (58 cents).

Trade Idea 4: Buy the March 37/41 bull Risk Reversal (5 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 saw with the first full week of the New Year in the books, equity markets ranging from being a bit extended to digesting the move in a pullback.

Elsewhere look for Gold to pause in its uptrend while Crude Oil pulls back in consolidation. The US Dollar Index continues in a short term decline while US Treasuries pause in their downtrend. The Shanghai Composite looks to pause in its move higher while Emerging Markets continue to drive higher.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts are mixed with the IWM pulling back in the short term while the SPY and QQQ digest new highs from Thursday. All look stronger on the longer timeframe. 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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