Top Trade Ideas for the Week of September 3, 2013: Bonus Idea

• Posted by Greg Harmon
• on September 3rd, 2013

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

Monsanto, Ticker: $MON

Monsanto, $MON, had been moving lower, making 3 consecutive lower highs and lower lows from mid May through to early August. But then it found a base between 94.85 and 98. Now it is consolidating in a small bull flag under 98 with a Measured Move higher to 101.15 on a break over 98. The Relative Strength Index (RSI) is breaking the mid line and trending higher with a Moving Average Convergence Divergence indicator (MACD) that is moving up. Both support more upside. There is resistance higher at 100 and 102.50 followed by 104.20 and 106.40 before the previous top. Support lower comes at 96.80 and 94.85 followed by 93.0 and 91.75 before 89.80.

Trade Idea 1: Buy the Stock on a move over 98 with a stop at 96.60.

Trade Idea 2: Buy the Stock now with a September 6 weekly 97.5 Put /September 100 Call Collar (Collar priced at 16 cent credit late Friday).

Trade Idea 3: Buy the September 97.50 Calls ($2.21) on the 98 trigger.

Trade Idea 4: Buy the September 97.50/100 Call Spread ($1.14) and sell the September 95 Put (91 cents) on the 98 trigger.

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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, as September begins, looks for Gold to continue to bounce in its downtrend while Crude Oil rises with a chance of consolidation. The US Dollar Index looks to be reversing higher while US Treasuries are biased higher in the short term in their downtrend. The Shanghai Composite looks to continue to consolidate with an upward bias as Emerging Markets are poised to move lower. Volatility looks to remain subdued but creeping higher keeping the wind at the backs of the equity index ETF’s SPY, IWM and QQQ, despite the moves lower this week. Their charts suggest that the downside is not over yet though with the SPY and IWM looking lower while the QQQ looks the strongest and most likely to just consolidate instead of falling. Use this information as you prepare for the coming week and trad’em well.

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