4 Trade Ideas for Wells Fargo: Bonus Idea

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

Wells Fargo, $WFC, comes into the week at resistance and an all-time high. The Bollinger Bands® are pointing higher with the RSI rising in the bullish zone and the MACD positive and moving up. There is no resistance above 85. Support lower sits at 83.25 and 82. Short interest is low at 1.4%. The stock pays a dividend with an annual yield of 2.13% and has traded ex-dividend since August 8th.

The company is expected to report earnings next on October 14th before the open. The October options chain shows biggest open interest at the 75 and 80 strikes on the put side and at the 80 strike followed by the 85 and 87.50 strikes on the call side. In the November chain open interest builds from 80 to a peak at 65 on the put side and rises from 80 to a peak at 92.50 on the call side. Finally, in the December chain open interest is biggest at the 75 then 65 strikes on the put side and at the 85 then 90 strikes on the call side.

Wells Fargo, Ticker: $WFC

Trade Idea 1: Buy the stock on a move over 85 with a stop at 81.

Trade Idea 2: Buy the stock on a move over 85 and add an October 85/80 Put Spread ($1.83) while selling the November 90 Calls ($1.80).

Trade Idea 3: Buy the October/November 90 Call Calendar (92 cents) while selling the October 79 Put (95 cents).

Trade Idea 4: Buy the December 77.50/87.50/95 Call Spread Risk Reversal (41 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 coming out of a week with the FOMC meeting and Quadruple Witching, saw equity markets continue to look rock solid, making new highs in the index ETFs across the board.

Elsewhere, look for Gold to continue the uptrend to new highs while Crude Oil drifts in consolidation. The US Dollar Index continues to run sideways in consolidation, while US Treasuries may be in the early stages of reversing their downtrend. The Shanghai Composite looks to continue the uptrend to new 10 year highs while Emerging Markets also continue their uptrend at 4 year highs.

The Volatility Index looks to continue to hold at low levels, making life easier for equity markets to the upside. The charts of the SPY, the IWM and the QQQ are all strong on both timeframes. The SPY and the QQQ added 3 more all-time high closes, including Friday, while the IWM saw profit taking Friday after its first new all-time high in 46 months. 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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