Top Trade Ideas for the Week of August 13, 2012: Bonus Idea

• Posted by Greg Harmon
• on August 13th, 2012

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

JP Morgan, Ticker: $JPM

JP Morgan, $JPM, is forming a bull flag at resistance at 37.25 with a Relative Strength Index (RSI) that is trying to move into bullish territory and a Moving Average Convergence Divergence indicator (MACD) that is positive. Both support further upside. The series of higher highs and higher lows is also a positive and the 3-box reversal Point and Figure chart (PnF) carries a price objective of 76. There is resistance higher at 37.87 and then a gap to fill to 40.20 with resistance higher at 43.45. Support is found below at 36.50 and 34.50 followed by 33.10, 32.20 and 30.60.

Trade Idea 1: Buy the stock on a break over 37.25 with a 70 cent trailing stop.

Trade Idea 2: Buy the September 38 Calls (offered at 75 cents late Friday) on a break over 37.25.

Trade Idea 3: Sell the September 33 Puts (23 cents) on a break over 37.25.

Trade Idea 4: Buy the September 33/38 bullish Risk Reversal (52 cents).

Trade Idea 5: Buy the October 38/41 Call Spreads selling the October 33 Put (27 cents).

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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 new week look like more of the same. Gold and Crude Oil are better to the upside with Oil stronger and Gold having a chance of consolidation. The US Dollar looks to continue to pullback in the uptrend with Treasuries possibly moving higher in the short run, within a pullback. The Shanghai Composite and Emerging Markets are poised to continue higher, at least in the short run for the Chinese market. Volatility looks ready to test the lows of 2005 through 2007. This creates a very positive backdrop for the Equity Index ETF’s. The charts of the SPY and QQQ agree with the inter-market view, while the IWM looks like the best of the three to consolidate the recent gains. 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.

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