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

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

Bank of New York Mellon, $BNY, comes into the week reversing after a pullback to the 38.2% retracement of the last leg higher. It confirmed the reversal Friday completing a morning star pattern. The RSI is rising up out of oversold territory with the MACD negative in leveling. There is support at 143 then 141 and 139.50. Resistance above is at 146.50 and 148 then 150.25 and 153 before 155 add 157. Short interest is low at 1.5%.  The stock pays a dividend with an annual yield of 1.73% and has traded ex dividends since July 27th.

The company is expected to report earnings next the morning of October 15th. The October options chain shows biggest open interest at 160 and then 150 on the put side. On the call side it builds from 155 to a peak at 170. In the November chain open interest is light on the put side and biggest at 155 on the call side. Finally, in the December chain, open interest is largest at the 145 put and spread from 145 to 185 on the call side.

Bank of New York Mellon, Ticker: $BNY

Trade Idea 1: Buy the stock on a move over 146 with a stop at 140.

Trade Idea 2: Buy the stock on a move over 146 and add an October 140/135 Put Spread ($1.25) while selling the December 165 Calls ($1.00).

Trade Idea 3: Buy the October/November 155 Call Calendar ($2.70) while selling the November 140 Put ($2.40).

Trade Idea 4: Buy the December 135/150/160 Call Spread Risk Reversal ($1.05).

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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 September payroll report in the books and a strong upward shift in the Treasury yield curve saw equity markets again weather tough seasonal sentiment and now they head into an historically strong period in the election cycle.

Elsewhere, look for Gold to continue a short term move lower with Crude Oil pausing in the short term move higher. The US Dollar Index looks to continue through the top of the zone on the verge of an uptrend while US Treasuries continue to move lower at 24 year high yields and all-time lows in price for the Treasury Bond ETF. The Shanghai Composite looks set to continue in consolidation when it reopens Thursday while Emerging Markets continue to show risk to the uptrend.

The Volatility Index looks to continue low in the normal zone, near the lows of the year keeping a tailwind behind equities. The charts of the SPY and the QQQ are breaking their flags over support on the shorter timeframe, on the edge of resuming the uptrend, while the IWM is bouncing in the short term downtrend. The SPY and QQQ continue to look strong on the longer timeframe with the SPY consolidating at the highs and QQQ making new highs while the IWM shows some signs of managing the risk to the 19 month uptrend. 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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