4 Trade Ideas for Progressive: Bonus Idea

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

Progressive, $PGR, started higher out of consolidation in December. In a two-step move higher it made a top at the beginning of April and the started lower. It found support at the end of the month and bounced to a lower high at the start of May. It dropped back to the prior low and found support again and reversed. Now it is back at the April high, confirming a double bottom and pressing towards printing a higher high.

The Bollinger Bands® are running higher with the RSI holding in the bullish zone and MACD positive and moving higher. There is no resistance above 120.50. Support lower sits at 117.50 and 115.85. Short interest is low at 1.1%. The stock pays a dividend with an annual yield of 0.34% and will begin to trade ex-dividend July 6th. The company is expected to announce earnings next on June 21st.

The June options chain shows the open interest focused at the 105 put strike and at 115 and 120 on the call side. In the July chain, it is biggest at the 110 and 100 puts and then at the 120 call. In August the open interest is biggest at the 85 put and then at the 120 and 125 calls.

Progressive, Ticker: $PGR

Trade Idea 1: Buy the stock on a move over 120.50 with a stop at 117.

Trade Idea 2: Buy the stock on a move over 120.50 and add a July 115/110 Put Spread ($2.40) while selling an August 130 Call ($1.50).

Trade Idea 3: Buy the July/August 125 Calls Calendar ($2.25) while selling the July 110 Put ($1.30).

Trade Idea 4: Buy the August 110/120/125 Call Spread Risk Reversal (30 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 second week of June and the last week before the next FOMC meeting, saw equity markets take a breather, digesting the strong finish to the prior week.

Elsewhere look for Gold to pause in its short term move higher while Crude Oil drives towards a retest of the March highs. The US Dollar Index continues to hold just below resistance while US Treasuries move lower. The Shanghai Composite looks to continue the short term move higher while Emerging Markets continue their downtrend.

The Volatility Index looks to remain slightly elevated making the path somewhat easier for equity markets to the upside. Their charts failed to follow through on last week’s strength though, leaving them in consolidation without making a higher high and lacking momentum on the shorter timeframe. On the longer timeframe it is too soon to tell if the IWM, the QQQ and the SPY are reversing or setting up for the next leg lower. Look for more uncertainty and sideways consolidation. 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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