Top Trade Ideas for the Week October 6, 2014: Bonus Idea

• Posted by Greg Harmon
• on October 6th, 2014

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

Netflix, Ticker: $NFLX

Netflix, $NFLX, moved higher fast off of a bottom at 320 to the top at 473 in early July. The pullback from there halted at 420, a prior support area before moving to a new high at 487. The latest pullback established a higher low at 440 and the price is now moving higher again. The RSI is breaking higher as well with the MACD about to cross up, both supporting more upside. There is resistance at 460.40 and the 487. Support lower comes at 440 and 430 before 420. Short interest is high at over 10%. The company is scheduled to report earnings after the close October 15th, so take profits or protect them ahead of the report.

Trade Idea 1: Buy the stock on a move over 460.40 with a stop at 450.

Trade Idea 2: Buy the October 10 Expiry 460 Calls (offered at $5.20 late Friday) on the same trigger.

Trade Idea 3: Buy the October 460/485 Call Spread ($10.75) on the same trigger.

Trade Idea 4: Buy the October 460/485/510 Call Butterfly ($5.90).

Trade Idea 5: Buy the October 460/485/500 broken wing Call Butterfly ($7.40).

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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, as the calendar turns to October sees the equity markets have weathered a pullback, but are still not totally out of trouble. Elsewhere look for Gold and Crude Oil to continue their pullbacks. The US Dollar Index and US Treasuries look to continue to move higher. The Shanghai Composite is strong and looks good for more upside while and Emerging Markets are biased to the downside with the possibility of a bounce. Volatility looks to remain subdued, keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts all printed short term reversals higher, but look weaker on the longer timeframe. Play the reversals with caution for this week. Use this information as you prepare for the coming week and trad’em well.

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If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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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