4 Trade Ideas for Progressive: Bonus Idea

• Posted by Greg Harmon
• on March 9th, 2020

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

Progressive, $PGR, gapped down in July and then continued to a bottom in October. It reversed there and retested the top in February before dropping again. This move retraced about 78.6% of the rise and then reversed sharply. It is now consolidating under resistance at a lower high and under the 20 day SMA.

The RSI is leveling at the mid line with the MACD curing up into positive territory and about to cross. There is resistance at 81.15 and 82.30 then 84 and 85. Support lower comes at 79.50 and 78.50 then 77 and 74.50 before 72.30. Short interest is low at 1.1%. The stock pays a dividend with an annual yield of 0.50% and starts trading ex-dividend on April 6th. The company is expected to report earnings next on April 14th.

The March options chain show open interest spread on the put side from 75 to 85. On the call side it rises from 77.50 to a peak at a high level at 85. The April options chain is the first to cover the next earnings report and it is just starting to build open interest. The May options show largest open interest at the 72.50 put strike and then at the 80 call.

Progressive, Ticker: $PGR

Trade Idea 1: Buy the stock on a move over 81.25 with a stop at 79.25.

Trade Idea 2: Buy the stock on a move over 81.25 and add an April 80/75 Put Spread ($3.10) while selling the April 85 Calls ($1.95).

Trade Idea 3: Buy the March/April 85 Call Calendar ($0.95) and sell the April 72.50 Put ($1.00 credit).

Trade Idea 4: Buy the April 72.50/85 bullish Risk Reversal (30 cent credit).

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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 the second week of March sees the equity markets remain in distress with volatile moves and pulling back.

Elsewhere look for Gold to continue higher while Crude Oil continues to the downside. The US Dollar Index looks to continue lower as well while US Treasuries make new highs. The Shanghai Composite continue higher in broad consolidation while Emerging Markets move lower.

The Volatility Index looks to remain at extreme levels keeping the pressure on equity markets. Their charts look weak, especially on the shorter timeframe. On the longer timeframe both the QQQ and SPY had indecision candles, perhaps a reversal, but also a possible continuation lower. The IWM looks much weaker but at support. Use this information as you prepare for the coming week and trad’em well.

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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