4 Trade Ideas for Visa: Bonus Idea

• Posted by Greg Harmon
• on January 11th, 2021

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

Visa, $V, had a choppy rise up to a consolidation zone through all of June and July and half of August. It went to make a higher high from there as it topped in September. A two-step pullback found support at the end of October and it reversed back higher. It gapped back to the prior high and has consolidated since. Two weeks ago, it made a higher high but could not hold up and fell back into the prior resistance, now acting as support.

The RSI is rising now in the bullish range with the MACD avoiding a cross down as it trends higher. There is resistance at 216.25 and 220.50. Support lower comes at 212.50 and 207.50 then 204 before a gap to fill to 200. Short interest is low under 2%. The stock pays a dividend with a 0.59% annual yield. The company is expected to report earnings next on January 28th.

The January options chain show largest open interest at the 205 put with good size at the 200, 195 and 210 put as well. The call side is much larger and biggest from 210 to 220. In the January 29 expiry chain, the biggest put open interest is at the 205 strike and then 217.50. On the call side it is again much bigger and found at 222.50 and 227.50.

February options have the biggest open interest at 210 on the put and then it tails lower. On the call side it is focused from 215 to 220. In the March chain open interest on the put side is biggest at 210 then 205 and tails lower. The call side is biggest by far at 210 but also large at 205 and 250.

Visa, Ticker: $V

Trade Idea 1: Buy the stock on a move over 217 with a stop at 212.

Trade Idea 2: Buy the stock on a move over 217 and add a January 29 Expiry 215/205 Put Spread ($4.40) while selling a March 230 Call ($4.15) to fund the protection.

Trade Idea 3: Buy the January 22 Expiry/March 220 Call Calendar ($6.10).

Trade Idea 4: Buy the March 200/220/240 Call Spread Risk Reversal ($1.70).

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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 first week of 2021 in the books, saw equity markets show resilience with a strong move higher despite frightening political news.

Elsewhere look for Gold to continue its short term pullback in consolidation while Crude Oil marches higher. The US Dollar Index continues to drift to the downside while US Treasuries move in a downtrend. The Shanghai Composite and Emerging Markets are driving higher in uptrends.

The Volatility Index looks to remain low and stable making the path easier for equity markets to the upside. Their charts look strong on both timeframes. On the shorter timeframe both the QQQ and SPY sit at all-time highs in uptrends with the IWM a tad bit overbought. On the longer timeframe all 3 are in very strong uptrends. 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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