Top Trade Ideas for the Week of October 3, 2011: Bonus Idea

• Posted by Greg Harmon
• on October 2nd, 2011

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

Thoratec, Ticker: $THOR

Thoratec, $THOR, printed a shooting star doji on Tuesday and is falling back to to support. The Relative Strength Index (RSI) is rolling lower after stalling just over 50, remaining bearish, and the Moving Average Convergence Divergence (MACD) indicator is low and starting to fade. Look for this to head lower with support at 31 and 30 before the strong support at 29.50. Through that level triggers a Head and Shoulders top and a break of a Descending triangle, both with targets of 22.20. The gap at 27.62 will provide first support under the trigger followed by 27, 25.60 and 25.00 lower on the way. Short interest is elevated at 5.5% but not excessive. Place a stop initially at 33.60. Consider taking off the trade on a break at 29.60 and rolling into a October 29/25 Put spread at that time to lock in profits and continue to participate to the down side.

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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 heading into the first week of the 4th Quarter, very similar to what it did last week. Gold and Crude Oil are set up to continue lower with a chance that Gold consolidates instead. The US Dollar and Treasuries are set up to continue higher and the Shanghai Composite and Emerging Markets lower. Volatility is expected to remain elevated and perhaps increase, supporting the negative bias in the Equity Index ETF’s SPY, IWM and QQQ. At this point the QQQ that has been holding US Equities up looks the weakest. The cards are getting stacked against the US Equity market. 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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