Top Trade Ideas for the Week of November 4, 2013: Bonus Idea

• Posted by Greg Harmon
• on November 4th, 2013

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

Verizon, Ticker: $VZ

Verizon, $VZ, has had a strong run higher off of a bottom at 46. The chart above shows that it has now completed a bearish Bat Harmonic (green triangles) with a target to 49.32 or 47.70 on a reversal lower. The RSI is flat to slightly falling as the MACD is about to cross lower. There is support at 48.85 which coincides with the confluence of the 20, 50 and 200 day SMA’s with 46.30 and 45.40 below that. Options Open Interest shows beefy positions at the 50.50 Call and 51 Put this week but heavier Open Interest lower for the November Expiry.

Trade Idea 1: Sell the stock short on a break below 50.25 with a stop at 51.35.

Trade Idea 2: Buy the November 50 Put (offered at 41 cents late Friday).

Trade Idea 3: Buy the November 8 Weekly/November 50 Put Calendar (19 cents).

An alternative view sees the consolidation over 50.32 as a bull flag. A move over 51.35 the carries a Measured Move higher to 55.45. Resistance comes at 53.60 to 53.90 along the way.

Trade Idea 4: Buy the stock on a move over 51.35 with a stop at 50.30.

Trade Idea 5: Buy the November 50 Calls (92 cents).

Trade Idea 6: Buy the December 50/52.5 Call Spreads ($1.06).

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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 Friday which, heading into the last 2 months of the year sees the markets still looking positive but maybe in need of a short term pullback. Look for Gold and Crude Oil to continue lower. The US Dollar Index wants to move higher while US Treasuries are biased lower. The Shanghai Composite may consolidate but it and Emerging Markets are biased to the downside. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts suggest a possible pullback continuing for the IWM, with the QQQ possibly joining it and the SPY consolidating but maybe ready to reverse higher again. Use this information as you prepare for the coming week and trad’em well.

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