Top Trade Ideas for the Week of June 8, 2015: The Best

• Posted by Greg Harmon
• on June 7th, 2015

After reviewing over 1,000 charts, I have found some good setups for the week. This week’s list contains the first five below to get you started early. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which, heading into next week sees the equity markets continuing to look a bit vulnerable on the daily timeframe but strong on the weekly timeframe.

Elsewhere look for Gold to continue lower while Crude Oil consolidates with a slight downward bias. The US Dollar Index also is in broad consolidation with an upward bias while US Treasuries look to continue lower. The Shanghai Composite is back off to the races higher with a chance of consolidation while Emerging Markets look to continue 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 that the IWM is strong and taking over leadership while the QQQ looks strongest on the longer timeframe. The SPY may need more sideways consolidation before resuming higher. Use this information as you prepare for the coming week and trad’em well.

Here are the first 5 ideas for the week, to get you started:

AGCO, Ticker: $AGCO

AGCO, $AGCO, had a basing period after a pullback that lasted from October through January. It then stepped higher and pulled back before a second step higher and consolidation. What makes this interesting is the strong candle Friday breaking and holding the short term range of the week, and the turn of the RSI back higher. Support is firm at 50.50 and then possibly below at 49.40. Resistance higher is at 52 and then 53.75 and 56.50 from the slide lower. A Measured Move would target the 56.50 area above. That RSI held in the bullish range as well, with the lone dark spot the MACD continuing lower. Short interest is high at 19.2%. Enter long now (over 50.50) with a stop at 49.75. As it moves over 52 move the stop to 51 and then to a $1.15 trailing stop over 52.25. Take off 1/3 on a stall at 56.50 or higher. As an options trade consider the June 50 Calls (offered at $1.55 late Friday) and trade them like the stock trade (using the stock price as a trigger, stop and target). Add leverage by selling the June 50 Puts (35 cents) for a bullish risk reversal.

JinkoSolar, Ticker: $JKS

JinkoSolar, $JKS, rose from mid January to mid April, covering $14 higher, before consolidation. It broke that consolidation Friday with a Marubozu candle (starts at low, runs and closes at high) higher. Using that resistance and the rising 50 day SMA as support gives an ascending triangle and the break targets a move to 33.75. That is a nice gain from here but the break also triggers a Measured Move higher to 44. The RSI is bullish and rising with the MACD crossed up and rising. There is resistance higher at 33.40 and then 37.50, before the spike to 41.75 in 2010. Support lower comes at 30 and 27.75 followed by 26.80. Short interest is high at 17.2%. Enter long now (over 30) with a stop at 29.70. As it moves over 32 move the stop to break even and then to a $1.20 trailing stop over 32.25. Take off 1/3 on a stall at 44 or higher. As an options trade consider the June 31 Calls ($1.10) and trade them like the stock trade. Sell the June 27 Puts (20 cents) and or the June 33 Calls (25 cents) to lower the cost of a short term trade. Give it more time with the July 31 Calls ($1.90) selling the June 33 Calls (25 cents) and the July 28 Puts (95 cents) to lower your cost.

Manulife Financial, Ticker: $MFC

Manulife Financial, $MFC, pulled back to start the year, finding a bottom at the end of January. After a small bounce and pullback the price moved higher again through April. That full price action was a bearish Bat harmonic and after completing it retraced 38.2% of the pattern. Now it gets interesting. The Measured Move higher targets 20.60, which is also the prior high 2014. There is resistance at 19.30 and 20.20 along the way, with support at 18.65 and 18.10 below. The RSI is rising in the bullish zone and the MACD has just crossed up, a bullish signal. Short interest is low under 0.5%. Enter long on a move over 19.15 with a stop at 18.80. As it moves over 19.35 move the stop to break even and then to a 35 cent trailing stop over 19.50. Take off 1/3 on a stall at 20.60 or higher. As an options trade consider the June 19 Calls (35 cents).

STAAR Surgical, Ticker: $STAA

STAAR Surgical, $STAA, is testing resistance at 9.78 as it tightens consolidation. There is an Inverse head and Shoulders that would carry a price objective to at least 13.80 on a break higher, near the peak in July 2014. Closer in the short term rising trend support builds an ascending triangle that would target a move to 11.25 on a break higher. There is resistance at 9.78 and 10.25 followed by 11 and 11.87 before 13.70. Support lower comes at 8.90 and 8.50. The RSI is firmly holding tin the bullish zone while the MACD is crossing up, giving that bullish signal. Short interest is high at 15.7%. Enter long on a move over 9.78 with a stop at 9.38. As it moves over 10 move the stop to break even and then to a 35 cent trailing stop over 10.20. Take off 1/3 on a stall at 11.87 or higher and by 13.80. As an options trade consider the June 10 Calls (40 cents) and trade them like the stock trade, but expect some slippage as you try to exit as spreads are wide.

YY, Ticker: $YY

YY, $YY, made a slowly narrowing falling wedge starting in September that it broke above in April. Following the break it pulled back to retest the wedge resistance line before continuing a drift higher. Friday saw it break minor resistance at 70 as it opened the Bollinger Bands® to the upside. It may now be in a rising channel with trend resistance above near 75 but with Short interest over 24% we will give it a stronger read higher. There is resistance at 72.62 from the January high and then 80 and 84.40 before 96 from September. Support lower comes at 70 and 64.30 followed by 60. The RSI is bullish and rising and the MACD is crossing up after a pause sideways. Enter long on a move over 72.65 (or now holding over 70) with a stop at 70. As it moves over 74.50 move the stop to break even and over 75 to a $2.50 trailing stop. Take off 1/3 on a stall at 96 or higher. As an options trade consider the June 12 Expiry 71.50 Calls ($2.15) for a quick trade and trade them like the stock trade. Sell the June 12 Expiry 70 Puts ($1.15) to lower the cost. For a longer trade use the July 24 Expiry 71.5 Calls ($4.40) and sell the June 72 Calls ($2.05) to lower the cost. As the short June Calls expire look to sell July Calls as well. Add leverage by selling the July 60 Puts (65 cents).

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