4 Trade Ideas for Toronto Dominion Bank : Bonus Idea

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

Toronto Dominion, $TD, confirmed a double bottom as it broke above the August high in the middle of October. It continued to a top at the end of November and then pulled back, establishing a range. Last week it broke the range to the upside and paused in short term resistance to end the week. Continuation to the upside gives a target to 83.50.

The RSI is holding in the bullish zone with the MACD positive and rising. The Bollinger Bands® are opening to the upside. There is no resistance above 77. Support lower comes at 75.75 and 74 then 71.75. Short interest is low under 1%. The stock pays a dividend with an annual yield of 3.67% and begins to trade ex-dividend on January 7th. The company is expected to report earnings next on March 3, 2022.

The January options chain shows massive open interest at the 80 strike on both the put and call side, with sizable amounts at the 55 and 65 put as well at the 70 and 72.50 call. The February chain is just getting started. The April chain has biggest open interest at the 65 and 50 put strikes and at the 75 call strike.

Toronto Dominion, Ticker: $TD

Trade Idea 1: Buy the stock on a move over 78 with a stop at 75.50.

Trade Idea 2: Buy the stock on a move over 78 and add a February 75/70 Put Spread (95 cents) while selling the April 82.50 Calls (45 cents).

Trade Idea 3: Buy the February/April 80 Call Calendar (85 cents) and sell the February 72.50 Put (60 cents).

Trade Idea 4: Buy the April 72.50/77.50/82.50 Call Spread Risk Reversal (zero).

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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. As the books close on 2021, equity markets posted a good year for tech and large caps while small caps marked time the entire year.

Elsewhere look for Gold to continue its rise in consolidation while Crude Oil continues a short term move higher. The US Dollar Index looks to consolidate in the uptrend while US Treasuries churn in a range sideways. The Shanghai Composite looks to continue broad consolidation while Emerging Markets continue the downtrend.

The Volatility Index looks to remain in the normal range making the path easier for equity markets to the upside. The charts of the large cap SPY and tech heavy QQQ look strong on the longer timeframe, with the SPY leading the way. On the shorter timeframe both the QQQ and SPY remain near all-time highs but with stalling momentum, suggesting possible short term erosion. The IWM remains content to hold in the consolidation range that has held it almost all of 2021. Use this information as you prepare for the coming week and trad’em 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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