4 Trade Ideas for Humana: Bonus Idea

• Posted by Greg Harmon
• on May 8th, 2023

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

Humana, $HUM, comes into the week rising up to resistance. This is part of a rounding up out of a pullback to the 38.2% retracement of the last move higher. The Bollinger Bands® are open higher. The RSI is rising in the bullish zone with the MACD positive and moving higher. There is resistance at 540 and 552 then 564.50 and 570. Support lower comes at 528 and 517. Short interest is low at 1.3%. The stock pays a dividend with an annual yield of just 0.66% and will start trading ex-dividend on June 29th.

The company is expected to report earnings next on August 2nd. The May options chain shows biggest open interest at the 520 put strike and the 540 call strike. The June chain has open interest spread from 515 to 490 on the put side, biggest at 510. On the call side it is biggest at 530. Finally, the August chain has little going on in the put side. The call side has biggest open interest at the 580 strike.

Humana, Ticker: $HUM

Trade Idea 1: Buy the stock on a move over 540 with a stop at 525.

Trade Idea 2: Buy the stock on a move over 540 and add a June 525/510 Put Spread ($5.60) while selling the June 565 Calls ($5.20).

Trade Idea 3: Buy the May/June 550 Call Calendar ($7.95) while selling the May 517.50 Puts ($3.00).

Trade Idea 4: Buy the August 480/545/565 Call Spread Risk Reversal ($3.00).

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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 May FOMC meeting in the books, saw that equity markets showed resilience with a rebound Friday erasing an ugly midweek slump.

Elsewhere look for Gold to continue its uptrend while Crude Oil holds in the low end of a consolidation range. The US Dollar Index continues to drift sideways at support while US Treasuries consolidate in their downtrend. The Shanghai Composite looks to continue higher in consolidation while Emerging Markets consolidate.

The Volatility Index looks to remain very low and stable making the path easier for equity markets to the upside. The charts of the QQQ and SPY look strong on the longer timeframe with the IWM in consolidation. On the shorter timeframe both the IWM and SPY look to try to break consolidation while the QQQ heads higher. 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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