Top Trade Ideas for the Week of August 29, 2011: Bonus Idea

• Posted by Greg Harmon
• on August 28th, 2011

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

Edwards Lifesciences, Ticker: $EW

Edwards Lifesciences has a rising trend off of the bottom from early August. The Moving Average Convergence Divergence (MACD) indicator has been trending higher since the bottom and is crossed positive and increasing. The Relative Strength Index (RSI) has also been trending higher ans is rising sharply through the mid line. It is approaching some resistance at 74.50 and it if it can get through that then there is nothing to keep it from reaching resistance at 78.70. Through 78.70 then the next resistance levels come at 81.50 and 84. Place a stop under 72.50 for an entry now or wait on the break of 74.80 and use a stop just under that. This could also be played long by purchasing the September 75/80 Call Spread which was available near the close for $1.05, closing it out if the stock price moves under 70 as a stop loss. For the more aggressive trader, the Call Spread could be funded partially by selling a September 65 Put for 35 cents, making a net cost of 70c for the options combination but adding the downside risk of owning the stock at 65.70 on a close under 65 at September Expiry.

The Best

The Rest

(As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

After reviewing over 900 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 Saturday which
looks for the unofficial last week of Summer for Gold to bounce around in its uptrend while Crude Oil slows at resistance and turns lower. The US Dollar Index seems content to move sideways while US Treasuries are biased lower. The Shanghai Composite and Emerging Markets are biased to the downside with risk of the Chinese market running a little higher first. Volatility looks to remain elevated keeping the bias lower for the equity index ETF’s SPY, IWM and QQQ, despite the moves higher, with the QQQ looking to have the best chance to break the bear flags higher. Use this information as you prepare for the coming week and trade’m well.

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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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