4 Trade Ideas for Unilever: Bonus Idea

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

Unilever, $UL, started to move higher off the March low. It gapped up in 3 waves to a top in October. It fell back to retest the 200 day SMA from there and bounced almost back to the prior top. It consolidated from there in a symmetrical triangle until breaking down 2 weeks ago. It did not reach the target of 51.50 out of the pattern before finding support and consolidating at the 50% retracement of the full move higher. Friday saw it pushing to make a higher high and reverse.

The RSI is reversing up out of oversold status with the MACD leveling but still negative. There is support lower at 53.65 and 52.50 before 50.25 and 49.25 then 48. Resistance higher sits at 55.25 and 56.25 then 57 and 58.25 before 59.50 and 60.10. Short interest is nearly non-existent. The stock pays a dividend that yields 3.47% and begins to trade ex-dividend February 25th. The company is expected to report earnings next on April 23rd.

The February options chain shows big open interest at the 60 strike for both the puts and calls, but also large at the 62.50 call. In the March chain open interest is big at the 52.50 and 55 put strikes as well as the 55 and 60 calls. In May, the first to cover the next earnings report, open interest is biggest at the 55 put and the 65 call strikes.

Unilever, Ticker: $UL

Trade Idea 1: Buy the stock on a move over 55.25 with a stop at 53.50.

Trade Idea 2: Buy the stock on a move over 55.25 and add a March 52.50/50 Put Spread (60 cents) while selling a May 62.50 Call (35 cents).

Trade Idea 3: Buy the March/May 60 Call Calendar (75 cents).

Trade Idea 4: Buy the May 57.50/65 Call Spread while selling the May 50 Puts (20 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 heading into the President’s Day weekend saw equity markets continuing to look very strong.

Elsewhere look for Gold to continue its pullback while Crude Oil moves to the upside. The US Dollar Index may be pausing in the downtrend while US Treasuries continue their trend lower. The Shanghai Composite looks to resume its uptrend after the Lunar New Year holiday while Emerging Markets continues to march to new all-time highs.

The Volatility Index looks to remain very low and drifting toward a pandemic gap fill, making the path easier for equity markets to the upside. Their charts continue to look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY are moving back higher again while the IWM pauses to catch its breath over support. 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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