4 Trade Ideas for Molina Healthcare: Bonus Idea

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

Molina Healthcare, $MOH, comes into the week rounding up out of a pullback and moving over the 20 day SMA. It has the Bollinger Bands® squeezing, often a precursor to a move. The RSI is rising toward the midline with the MACD rising but negative. There is resistance at 175 and 192 then 203 and 212.50 before 228 and 242. Support lower is at 160 and 152. Short interest is moderate at 3.3%. The stock does not pay a dividend.

The company is expected to report earnings next on October 21st. The September options chain shows open interest spread from the 180 to the 130 strike on the put side. On the call side it is focused at the 180 strike. the October chain has biggest open interest at the 165 and 160 puts and then at 160 below but 200 and 185 strikes above. Finally, the November chain, which cover the earnings report, shows open interest build from 170 to a peak at 155 on the put side, spread from 160 to 190, biggest at 185 on the call side.

Molina Healthcare, Ticker: $MOH

Trade Idea 1: Buy the stock on a move over 169 with a stop at 160.

Trade Idea 2: Buy the stock on a move over 169 and add a September 165/155 Put Spread ($4.30) while selling the October 200 Calls ($3.50).

Trade Idea 3: Buy the September/October 180 Call Calendar ($4.40) while selling the September 155 Puts ($3.60).

Trade Idea 4: Buy the November 150/170/190 Call Spread Risk Reversal ($1.20).

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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 August options expiration in the books and heading into the Jackson Hole Fed Conference, saw equity markets looking strong, holding up in the face of worse than expected inflation reports.

Elsewhere, look for Gold to continue in consolidation in its uptrend while Crude Oil drifts in consolidation. The US Dollar Index continues the intermediate term move to the downside near 3 year lows while US Treasuries continue to consolidate in their downtrend. The Shanghai Composite looks to continue the rise to the top of the broad consolidation area while Emerging Markets continue their uptrend.

The Volatility Index looks to continue at low levels making life easier for equity markets to the upside as they print new highs. The charts of the SPY and QQQ continue to look strong on both timeframes, holding at all-time highs. The IWM is slightly weaker as it continues to struggle to clear and hold at new highs for the year. 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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