Top Trade Ideas for the Week of October 28, 2013: Bonus Idea

• Posted by Greg Harmon
• on October 28th, 2013

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

Goldman Sachs, Ticker: $GS

Goldman Sachs, $GS, has been moving in a channel since June. Now at resistance at 162.50 within that channel is has support for a push higher from a rising and bullish Relative Strength Index (RSI) and a MACD driving higher. A push through resistance has upside to the top of the channel at 171.

Trade Idea 1: Buy the stock on a break over 162.50 with a stop at 159.50.

Trade Idea 2: Buy the November 160 Calls (offered at $4.20 late Friday) on a break of 162.50.

Trade Idea 3: Buy the November1/November 165 Call Calendar ($1.10) on the same trigger.

Trade Idea 4: Buy the November1/November 165 Call Calendar and sell the November 170 Calls (60 cents) on the same 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, moving into the Halloween week and ending the seasonally scary October sees the markets looking strong. Specifically look for Gold to continue higher while Crude Oil maybe ready for a bounce after a downtrend. The US Dollar Index remains in a downtrend but at support so a reversal is possible, while US Treasuries are poised to continue higher. The Shanghai Composite looks weak and ready to continue lower while Emerging Markets may consolidate in the pullback in the uptrend. Volatility looks to remain low and unimportant keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts are showing that the SPY is strong and ready to move higher while the IWM and QQQ are consolidating. This could be the start of another round of rotation from the IWM and QQQ into the large cap stock in the SPY and Dow Jones Industrials. Use this information as you prepare for the coming week and trad’em well.

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