Top Trade Ideas for the Week of July 2, 2012: Bonus Idea

• Posted by Greg Harmon
• on July 2nd, 2012

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

Visa, Ticker: $V

Visa, $V, consolidated over 116.75 before making a double bottom at 112.10, near the gap, and moving back higher. Now approaching resistance at 125.10, it has support for a push higher through it from the bullish and rising Relative Strength Index (RSI) and a Moving Average Convergence Divergence indicator (MACD) that is positive. A break above has a Measured Move higher to 135.

Trade Idea 1: Buy the stock on a break over 125.10 with a $2 trailing stop. Take off 1/2 at 135 and let the rest trail.

Trade Idea 2: Buy the July 125 Calls on a break over 125.10 and trade them using the same stop and targets as the stock trade. These were offered at $1.77 Late Friday.

Trade Idea 3: Buy the July 6w/July Monthly 125 Call Calendar. These were offered at $1.18 late Friday.

Trade Idea 4: Sell the July 115 Put on the same trigger. These were bid at 36 cents late Friday.

Trade Idea 5: Buy the July 6w/July Monthly Call Calendar and sell the July 115 Put. This combination was offered for 82 cents late Friday.

Trade Idea 6: Buy the August 115/125 Bull Risk Reversal. A longer term play, These were offered for $2.23 late Friday.

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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 Saturday which, heading into the back half of the year we start with a holiday shortened week and a market with some upside momentum. Crude Oil looks to continue the move higher while Gold may consolidate the gains within a down channel. The US Dollar Index looks to continue its pullback in the uptrend with Treasuries continuing to consolidate with an upside bias. The Shanghai Composite may take a breather in its downtrend while Emerging Markets consolidate in their downtrend, determining if they want to reverse it. Volatility looks in control and the combination creates an environment where the Equity Index ETF’s are biased higher. A reversal by the US Dollar Index or a move higher by Treasuries will likely negate this. The charts of the Equity Indexes generally agree and point higher with the IWM the strongest followed by the SPY and then the QQQ. 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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