4 Trade Ideas for Bristol-Meyers Squibb: Bonus Idea

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

Bristol-Meyers Squibb, $BMY, made a bottom and started higher in July 2019. It continued higher, reaching the prior high in December. It broke over it and then consolidated through the end of the year. It started higher again in January but fell back to support. A second push higher met resistance at a lower high and fell back also. This time it did not stop at support though and continued lower all week. By Friday it had retraced 38.2% of the move off of the July low, and printed a Hammer candle, a possible reversal.

This was at a 15% drop from the high. The RSI is into oversold territory now with the MACD negative and dropping. The price is also well outside of its Bollinger Bands®. These conditions make for a good scenario for at least a bounce if not a reversal. There is support lower at 56 and 54 then 51.40 and 49.60 before 48.65. Resistance above comes at 59.65 and 61.75 then 62.80 and 63.50 then 65 and 67.50 before 68.25. Short interest is moderate at 2.7%. The stock pays a dividend with an annual yield of 3.05% and it has been trading ex-dividend since January 2nd. The company is expected to report earnings next on April 23rd.

The March options chain shows the biggest open interest at the 65 and 67.50 strikes on both the calls and puts. The April chain is biggest at the 57.50 put strike, but has size at the 55 and 50 put as well. Size is slightly lower at the 67.50 and 70 calls. In the May chain, the first covering the next earnings report, open interest builds from the 65 put down to a peak at the 52.50 strike. It is clustered from 62.50 to 70 on the call side, biggest at 65.

Bristol-Meyers Squibb, Ticker: $BMY

Trade Idea 1: Buy the stock on a move over 59.60 with a stop at 57.

Trade Idea 2: Buy the stock on a move over 59.60 and add a March 59/55 Put Spread ($1.60) while selling the April 62.50 Calls ($1.20).

Trade Idea 3: Buy the March/May 62.50 Call Calendar ($1.05) and sell the March 6 Expiry 55 Puts (60 cents).

Trade Idea 4: Buy the May 50/62.50/65 Call Spread Risk Reversal (10 cents).

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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 with the first 2 months of the year in the books, saw equity markets had their worst week in years, driving lower with alacrity never seen before.

Elsewhere look for Gold to pullback while Crude Oil continues to drive lower. The US Dollar Index looks to continue lower in the short term while US Treasuries prices set record highs. The Shanghai Composite looks to pullback after its move higher while Emerging Markets move lower in broad consolidation.

The Volatility Index looks to remain extreme making the path easier for equity markets to the downside. Their charts look horrible in the short term, but overextended so there is a possibility of a bounce or outright reversal. The longer term charts show a lot more damage, with the IWM sitting on long term support but the SPY and QQQ driving lower. Use this information as you prepare for the coming week and trad’em well.

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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