Top Trade Ideas for the Week of July 7, 2014: Bonus Idea

• Posted by Greg Harmon
• on July 7th, 2014

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

Amazon, Ticker: $AMZN

Amazon, $AMZN, has a lot going on in its chart, most of it positive after retracing the last leg higher by nearly 88.6%. This creates a great mosaic set up for a trade higher. The price broke the downtrending channel in June and has not looked back. The last leg higher before the current consolidation established a series of higher highs and higher lows, and carries a Measured Move to 360 on a break higher. There is an Inverse Head and Shoulders pattern with a neckline at 337.50 that has a price objective of at least 390 if triggered. The RSI is in the bullish zone and rising and after a leveling off period the MACD is about to cross up as well. The company reports earnings July 24th.

Trade Idea 1: Buy the stock on a move over 337.50 with a stop at 330.

Trade Idea 2: Buy the July 25 Expiry 337.50 Calls (offered at $13.30 late Thursday) and trade them like the stock trade.

Trade Idea 3: Buy the July 25 Expiry 337.5/360 Call Spread ($8.45).

Trade Idea 4: Buy the July 25 Expiry 337.5/360 Call Spread and sell the July 25 Expiry 310 Put ($4.85).

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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 Thursday which, as July gets in full swing sees the equity markets looking very strong. Elsewhere look for Gold to continue in its uptrend while Crude Oil continues lower in a pullback in the uptrend. The US Dollar Index looks to move sideways while US Treasuries consolidate but are biased lower. The Shanghai Composite and Emerging Markets are biased to the upside. Volatility looks to remain unusually low and actually biased lower keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts show strength but with the QQQ possibly getting extended and the IWM near prior resistance. Use this information as you prepare for the coming week and trad’em well.

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