Top Trade Ideas for the Week of March 12, 2012: The Rest Premium

• Posted by Greg Harmon
• on March 11th, 2012

Here are the Rest of the Top 10 with Premium Content in Bold:

Avon Products, Ticker: $AVP

Avon Products, $AVP, found a bottom and started higher after the 50 day Simple Moving Average (SMA) crossed up through the 100 day SMA Thursday. The Relative Strength Index (RSI) held bullish and is turning higher again while the Moving Average Convergence Divergence (MACD) indicator is negative but trending back towards the zero line. These both support more upside. A move up over 19.60 puts it into the gap higher. Resistance is found higher at 18.80 and 19.17 before that 19.60 gap. Above it 20.40, 22.26 and 23.32 are next in line. Support lower comes at 18.10 and 17.30 before 16.80 and 16.30. Enter long now with a 50 cent trailing stop. Take off 1/3 on a touch at 19.60 and tighten the stop to 35 cents. At 22 take another 1/3. As an options trade consider buying the April 19 Calls (offered at $0.55 late Friday) and trading them like the stock trade using the same stops and profit targets. You can also spread them against the April 22 Calls when you can get back your full premium for selling the upside calls.

Citrix Systems, Ticker: $CTXS

Citrix Systems, $CTXS, is back against resistance at 77 and looking strong. The RSI is bullish and rising and the MACD is negative but trending higher and close to a positive cross. A move over 77 breaks the neckline of an Inverse Head and Shoulders and sets a price objective of at least 97.21. Resistance is found higher at 78.40 and 80.12 before 83.00, 85.44 and 88.00. Support lower comes at 73.20 and 71.80 followed by 70, 68.15 and 66.35. Enter long on a move over 77 with a $1.50 trailing stop. Take off 1/3 at 83 and another 1/3 at 88, tightening the stop to $1.00 from there. As an options trade you can buy the April 77.5 Calls ($2.75) and play them using the same stop and profit targets as the stock. Alternatively consider the April 80/85 Call Spreads ($1.25) and look at offsetting the cost by selling the April 70 Puts ($1.10) leaving a Call Spread Risk Reversal for 15 cents with $5 maximum profit, or 33:1 reward to risk.

Dupont de Nemours, Ticker: $DD

Dupont de Nemours, $DD, is testing resistance at 52.10, which was significant back in August and May as well. A move over 52.10 has a Measured Move higher to 61.00. The RSI is bullish and rising and the MACD, although negative, has been improving. Both support more upside and a push through. Resistance higher is found at 54 and 54.65 before 55.40 on the way higher. Support comes at 50.80 and 49.35 before 48.10. Enter long on a move over 52.10 with a $1.00 trailing stop. Take off 1/3 on a touch at 55.40. As an options trade consider buying the April 52.50 Calls ($0.88) and trading them like the stock trade using the same stop and profit target. You can reduce the cost and create a bullish Risk Reversal by selling the April 48 Puts (46 cents) or sell them as a solo trade to collect premium.

Great Lakes Dredge & Dock, Ticker: $GLDD

Great Lakes Dredge & Dock, $GLDD, has been stepping higher since finding a bottom in October. It looks to be moving up out of the latest step now. The RSI is bullish and the MACD is improving, both supporting a move higher. A move over 7.35 starts the next step and a target of 8.55 on a Measured Move. There is resistance higher at 7.50 and 7.80 followed by 8.13 and 8.50 before the top at 8.81. Support lower comes at 7.00 and 6.70 before 6.30 and 6.05. Enter long on a move over 7.35 with a 25 cent trailing stop. Take off 1/3 at 7.80 and another 1/3 at 8.50. Options are too thin and wide to consider.

HollyFrontier, Ticker: $HFC

HollyFrontier, $HFC, is breaking above resistance at 35.45 and heading higher. The RSI is bullish and rising and the MACD is about to cross positive, both supporting more upside. Looking back to the run from December gives a Measured Move to 56. There is resistance at 37 and then 39 before free air. Support lower comes at 34.50 and 33.10 followed by 32.10. Enter long now with a 75 cent trailing stop. Take off 1/3 at 39 and another 1/3 if it gets to 50. As an options trade consider buying the April 36.50 Call ($1.65) and trading it with the same stop and profit targets as the stock. You can also sell the April 31.50 Puts ($0.55) to reduce the cost and create a bull Risk Reversal or just to take in premium.

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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 heading into the new week Gold continues to confuse on a short term basis looking higher in a downtrend in a long term uptrend while Crude Oil consolidates in a higher range with an upside bias. The US Dollar Index seems ready to continue higher while Treasuries continue to consolidate with a bias to the downside. Both the Shanghai Composite and Emerging Markets are consolidating and may continue with a bias to the upside. The Volatility Index looks to have bottomed but also shows no signs of rising soon. These influencers paint a scene for the Equity Index ETF’s SPY, IWM and QQQ to move higher, and after the small pullback last week all of their charts agree and are biased higher with the SPY and QQQ looking a bit stronger than the IWM. 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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