Top Trade Ideas for the Week of March 11, 2013: Bonus Idea

• Posted by Greg Harmon
• on March 11th, 2013

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

American International Group, Ticker: $AIG

American International Group, $AIG, is breaking higher into territory not seen in over 2 years. It has support for more upside from a rising and bullish Relative Strength Index (RSI) and a Moving Average Convergence Divergence indicator (MACD) that shows the signal line curling higher and the histogram moving positive. There is resistance nearby at 40 and then 43 and 47.35 followed by 51.60, all from more that 2 years ago. Support below is found at 37.20 and 36.60 followed by 35.60 and 35.

Trade Idea 1: Buy the stock on a move over 40 with a stop at 38.75.

Trade Idea 2: Buy the April 40 Calls (Offered at $1.06 late Friday) on a move over 40.

Trade Idea 3; Buy the April 40/43 Call Spreads (84 cents) on a move over 40.

Trade Idea 4: Sell the April 37 Puts (38 cents) on a move over 40.

Trade Idea 5: Buy the March/April 40 Call Calendar (79 cents).

Trade Idea 6: Buy the April 40/43 Call Spread selling the April 37 Puts (46 cents) on a move over 40.

Trade Idea 7: Buy the March April 40 Call Calendar selling the April 37 Puts (41 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 March Options Expiration Week sees the equity markets feeling a bit euphoric. Elsewhere Gold looks to continue to consolidate with a downward bias while Crude Oil slowly decides if it wants to move back higher. The US Dollar Index seems strong like a lion while US Treasuries play the part of the lamb. The Shanghai Composite is set up to continue to trend lower in the longer scale uptrend while Emerging Markets consolidate with a bias to the upside. Volatility looks to remain very low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, despite the strong moves higher recently. A reversal in US Treasuries could derail the Equity rally and it would not be a surprise if the SPY and IWM consolidated or pulled back a bit in their trends higher. Use this information as you prepare for the coming week and trad’em well.

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Dragonfly Capital Views Performance Through February 2013 Expiry

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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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