4 Trade Ideas for the Bank of New York Mellon: Bonus Idea

• Posted by Greg Harmon
• on August 26th, 2024

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

The Bank of New York Mellon, $BK, comes into the week breaking to a new all-time high after a 6 week consolidation. It has a RSI rising in the bullish zone with the MACD positive and climbing. The Bollinger Bands® are open higher to allow a move. There is no resistance above. Support lower is at 65.75 and 65 before 64 and 62.50. Short interest is low at 1%. The stock pays a dividend with an annual yield of 2.83% and has traded ex-dividend since July 22nd.

The company is expected to report earnings next on October 11th. The September options chain shows biggest open interest at the 50 put strike and the 65 call strike. In the October chain it is light all around but biggest at the 65 put and 70 call. In the December chain the 60 put has the biggest open interest and the 65 and 60 call strikes are the largest.

The Bank of New York Mellon, Ticker: $BK

Trade Idea 1: Buy the stock on a move over 66.75 with a stop at 64.

Trade Idea 2: Buy the stock on a move over 66.75 and add an October 65/60 Put Spread ($1.05) while selling the December 72.50 Call (90 cents).

Trade Idea 3: Buy the September/October 70 Call Calendar (75 cents) while selling the October 60 Put (40 cents).

Trade Idea 4: Buy the December 60/70/75 Call Spread Risk Reversal (35 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 with the Fed Jackson Hole meeting in the rear view mirror, equity markets continued their progress higher, shifting from the large caps and tech names to small caps Friday, but without a rotation this time.

Elsewhere look for Gold to continue its uptrend while Crude Oil consolidates in a narrow range and at risk for a drop. The US Dollar Index continues to move to the downside while US Treasuries consolidate in their downtrend. The Shanghai Composite looks to continue the downtrend while Emerging Markets may start a new uptrend.

The Volatility Index looks to remain low and stabilizing making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe, with the IWM joining the SPY and QQQ in that view. On the shorter timeframe both the QQQ and SPY are slowing down and watching the short term money flow into the IWM. 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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