Top Trade Ideas for the Week of July 27, 2015: The Best

• Posted by Greg Harmon
• on July 26th, 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 the last week of July sees the equity markets a bit weaker but mixed with the tech names the strongest.

Elsewhere look for Gold to continue lower along with Crude Oil. The US Dollar Index may move sideways or continue higher while US Treasuries are biased to the upside. The Shanghai Composite is looking stronger and has almost dispelled all possibility of a Dead Cat Bounce while and Emerging Markets are confirming the resumption of the move lower.

Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts are a bit mixed, with all better on the longer timeframe. The QQQ is the leader on the weekly timeframe with the IWM next and then the SPY. On the shorter timeframe the QQQ’s are also looking the strongest with the SPY and IWM worse, but all biased lower short term. 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:

Danaos, Ticker: $DAC

Danaos, $DAC, a shipping company, has been on my radar before for a break out higher. But this never materialized. Instead it fell back to the rising trend support and then settled at the 200 day SMA. Friday saw a move higher off of that in an ugly market, closing over the 20 day SMA. The RSI is rising and through the mid line with the MACD crossed up and rising too. It may not break the long term resistance but a move to it is still 10%. There is resistance at 6.40 and 6.70 before a target of 9.40 on a break of the ascending triangle higher. Support lower comes at 5.96 and 5.40. Short interest is low under 1%. Enter long on a move over 6.09 (or hold over 6) with a stop at 5.95. As it moves over 6.15 move it to a 15 cent trailing stop and to a 20 cent trailing stop over 6.205. Take off 1/3 on a stall at 6.70 or higher. There are no options contracts for this name.

Mobileye, Ticker: $MBLY

Mobileye, $MBLY, broke a falling wedge in March and rose to the target. It stalled there for two months, consolidating the move, before a leg higher over the November 2014 high. After a brief consolidation there it moved higher to the current consolidation. A break higher targets a move to 70. A pullback looks for a retracement to 52. The RIS is bullish but rolling over at the overbought level and the MACD starting to cross down. Short interest is high at 13% and the company is expected to report earnings August 6th. Enter long on a move over 61.70 with a stop at 59.50. As it moves over 63 move the stop to break even and then to a $2 trailing stop over 63.70. Take off 1/3 on a stall at 70 or higher. As an options trade consider the August 7 Expiry 60.5 Calls (offered at $2.05 late Friday) and trade them like the stock trade (using the stock price as a trigger, stop and target). Gain leverage and offset some cost by selling the august 7 Expiry 65 Call (70 cents) for a Call Spread. If it falls below 59.75 enter short with a stop at 60.75. As it moves below 59 move the stop to break even and then to a $1 trailing stop under 58.75. Take off 1/3 on a stall at 52 or lower. As an options trade to the downside look at the August 7 Expiry 59.5 Puts ($2.05) and trade them like the stock trade.

Take-Two Interactive, Ticker: $TTWO

Take-Two Interactive, $TTWO, moved higher off of the SMA’s in early July to settle the past week at new 10 year highs. This is moving into the gap created after pulling back from the all time high print in March 2005 at 41.15. The RSI is bullish but a bit extended into the overbought range while the MACD is rising. There is resistance at 31.65 and then 35.50 and 38.50 from 10 years ago before that all time high. The Measured Move higher takes it to 35.50. Support lower comes at 30.25 and 28.60 before 27. Short interest is high at nearly 20%. The company is expected to report earnings on August 10th. Enter long on a move over 31.65 with a stop at 30.75. As it moves over 32.10 move the stop to break even and then to a 65 cent trailing stop over 32.30. Take off 1/3 on a stall at 35.50 or higher, but look for that all time high. As an options trade consider the August 32 Calls ($1.15) and trade them like the stock trade. Sell the August 28 Puts (25 cents) to gain leverage if need be. If it falls below 30.75 enter short, but using options to avoid the pain of a short squeeze. Consider the August 30 Puts (85 cents) and sell the August 28 Puts (25 cents) for a Put Spread back to the support zone.

Intrexon, Ticker: $XON

Intrexon, $XON, moved higher to start the year and then went through a 4 and a half month rounding consolidation. It moved up out of that two weeks ago to a new high. As it sits there the RSI is in the bullish zone but pulling back from the overbought region and the MACD is leveling. There is no resistance over 60, but a Measured Move to 67. Support lower comes at 55.60 and 51 followed by 45. Short interest is high at 26%. The company is expected to report earnings on August 10th. Enter long on a move over 60 with a stop at 57. As it moves over 62 move the stop to break even and then to a $2.50 trailing stop over 62.50. Take off 1/3 on a stall at 67 or higher. As an options trade consider the August 50/60/65 bullish Call Spread Risk Reversal ($0.85) or straight August 60/65 Call Spreads ($1.45). Should those topping shadows play out with a move under 55.60 enter short using a August 55/50 Put Spread ($2.30) looking for a pin in August Expiry at the high open interest at the 50 Put Strike.

Youku Tudou, Ticker: $YOKU

Youku Tudou, $YOKU, ran up over 150% from the March low to the high at 31.50 in June. Since then it has pulled back more than 61.8% and is consolidating in a symmetrical triangle between the 50% and 61.8% retracements. The break of the triangle would look for a move of $4.90. As it consolidates the RSI is creeping higher and the MACD has crossed up and is rising. Into the apex of the triangle the Bollinger Bands® are also starting to squeeze, often a precursor for a move. I am biased for the break to the upside, and there is resistance at 21.60 and 23.30 before 24.80 and 28. Support lower comes at 19.20 and 17.80 before 16 and 14.30 with the low at 11.85 beyond that. Short interest is elevated at 9.6% and the company is expected to report earnings August 18th. Enter long on a move over 21.60 with a stop at 20.60. As it moves over 22.50 move the stop to break even and then to a $2 trailing stop over 23.60. Take off 1/3 on a stall at 26.50 or higher. As an options trade consider the August 14 Expiry 21.5 Calls (95 cents) and trade them like the stock trade. On a break below 19.40 enter short with a stop at 20.60. As it moves under 18.30 move the stop to a $1 trailing stop and take off 1/3 on a stall at 14.30 or lower. Consider the August 14 Expiry 20 Puts ($1.05) for the short side.

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