Top Trade Ideas for the Week of January 3, 2012: Bonus Idea

• Posted by Greg Harmon
• on January 3rd, 2012

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

Celgene, Ticker: $CELG

Celgene, $CELG, has been building a bull flag, consolidating between 66.80 and 68.30 after a move higher off of the 100 day Simple Moving Average (SMA). This is also a Double Top from the November high. If it can get over this resistance level then it has a Measured Move to 73.30. The Relative Strength Index (RSI) is strong and bullish and has been trending higher. The Moving Average Convergence Divergence (MACD) indicator is positive but it has been fading recently. Support comes lower at 65.40 and then 64.50 followed by 63 and 61.

Trade Idea 1: Buy the stock on a move over 68.30 with a stop at 67 (2% trail)

Trade Idea 2: Buy the January 70 Calls on a move over 68.30 with a stop at 67
These Calls were offered at 63 cents late Friday and offer unlimited upside with a minimal capital outlay.

Trade Idea 3: Sell the January 65 Puts on a move over 68.30 with a stop at 67
Collecting premium of 64 cents based on late Friday levels, this is a bet that the stock will close above 65 by January Expiry.

Trade Idea 4: Buy the January 65/70 bullish Risk Reversal
Buying the January 70 Calls and selling the January 65 Puts, a combination of Ideas 2 and 3, creates the Risk Reversal. From Fridays prices this could be put on for a 1 cent credit.

The Best

The Rest Premium

The Rest

If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits feed and on chartly.

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 moving into the New Year that the theme for the week is consolidation or a movement with in the range with a few exceptions. Gold may move higher but in a downtrend while Crude Oil holds the broad range. The US Dollar Index and Treasuries look to continue their upside bias but in slow ranges. A violent move from either will likely continue to drive the Equity Markets. The Shanghai Composite looks to consolidate around the 2200 level while Emerging Markets tighten their range. Volatility looks to creep up in the downtrend. These all create an environment for Equities to move lower. The very short term aspects of the SPY, IWM and QQQ charts agree but suggest a continued sideways to slightly higher move after a few days. Use this information as you prepare for the coming week and trade’m 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.

blog comments powered by Disqus