4 Trade Ideas for PPG Industries: Bonus Idea

• Posted by Greg Harmon
• on May 24th, 2021

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

PPG Industries, $PPG, had a steady run higher off the pandemic low to a top in January. It pulled back from there to retest the pre-pandemic higher and then rounded out of the consolidation to the upside into April. After a gap up, it met resistance just above the 161.8% extension of the retracement of the pandemic drop and has been in consolidation since. The Bollinger Bands® have tightened as price sits at resistance.

The RSI has reset out of an overbought condition with the MACD crossed down and dropping but positive. There is no resistance above 181. Support lower comes at 176 and 173 then 170 and 167 before 156 and a gap to fill to154. Short interest is low at 1.5%. The stock pays a dividend with an annual yield of 1.21% and has been trading ex-dividend since May 7th. The company is expected to report earnings next on July 14th.

The June options chain shows open interest spread from 175 to 160 on the put side and from 170 to 190 on the call side. The July options cover the earnings report but have just started trading and have very little open interest. They show an expected move by expiry of about $15 for a range of 163 to 193. August options are also light.

PPG Industries, Ticker: $PPG

Trade idea 1: Buy the stock on a move over 181 with a stop at 176.

Trade idea 2: Buy the stock on a move over 181 and add a July 175/165 Put Spread ($3.10) while selling the August 200 Call ($1.50).

Trade idea 3: Buy the June/August 185 Call Calendar ($4.30) and sell the July 160 Puts ($1.50).

Trade idea 4: Buy the August 160/185/200 Call Spread Risk Reversal ($2.00).

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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 May options expiration in the books, saw equity markets take a pause.

Elsewhere look for Gold to continue its move higher while Crude Oil consolidates in a tight range. The US Dollar Index continues to drift to the downside and 3½ year lows while US Treasuries consolidation in their downtrend. The Shanghai Composite looks to continue to drift sideways in a broad range while Emerging Markets consolidate over long term resistance in a tightening range.

The Volatility Index looks to remain low making the path easier for equity markets to the upside. Their charts have all shifted to consolidation now though on the longer timeframe, with the SPY the latest to join. On the shorter timeframe the SPY continues to look the strongest with the IWM in the long consolidation next and the QQQ with the most work left to do to return to bullish. 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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