4 Trade Ideas for Bristol-Myers Squibb: Bonus Idea

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

Bristol-Myers Squibb, $BMY, bottomed in March and then quickly started to move higher. It topped in May and pulled back and triggered a Head and Shoulders top. It found support at the price objective and then reversed. It stalled as it hit falling trend resistance in August and pulled back. It found support in September and then reversed higher again in October. It stalled again two weeks ago at falling trend resistance and pulled back in a bull flag. Friday it broke that flag to the upside. Since April this whole price action can be seen a a tightening range.

The RSI is rising towards the bullish zone with the MACD positive and lifting higher. There is resistance at 62.35 and 63.75 then 65.50 and 67.50 before 68.50. Support lower comes at 60.40 and 59.45 then 58.35. Short interest is low under 1%. The stock pays a dividend with a 2.94% annual yield and started trading ex-dividend on October 1st. The company is expected to report earnings on November 5th.

The October 30 Expiry options chain shows large open interest from 56 to 61 on the put side but much larger open interest focused at 62 and 63 on the call side. The November 6 Expiry, covering the earnings report, has low open interest from 55 to 61 on the put side and bigger focused amounts at 62 and 64 on the call side. The November monthly options show big open interest at 65 and then 55, 57.50 and 60 on the put side. On the call side it is much larger and builds from 57.50 to a peak at 65 then tails to 72.50.

Bristol-Myers Squibb, Ticker: $BMY

Trade Idea 1: Buy the stock on a move over 62 with a stop at 60.25.

Trade Idea 2: Buy the stock on a move over 62 and add a November 5 Expiry 60/57 Put Spread (75 cents) while selling the November 65 Calls (72 cents).

Trade Idea 3: Buy the October 30 Expiry/November 63 Call Calendar ($1.20).

Trade Idea 4: Buy the November 57.50/62.50/65 Call Spread Risk Reversal (5 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 October options expiration in the books, saw equity markets had lost a bit of energy as they approached the highs.

Elsewhere look for Gold to continue to consolidate in the uptrend while Crude Oil consolidates in a broad range. The US Dollar Index continues in a short term move to the upside while US Treasuries consolidate at support. The Shanghai Composite looks to consolidate as well while Emerging Markets move higher.

The Volatility Index looks to remain stable at slightly elevated levels making the path slightly bumpy for equity markets. Their charts look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY are weathering digestion for now with shallow pullback. The IWM is looking strong as it is unwilling to yield any ground that it has gained since the September low. 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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