4 Trade Ideas for Ally: Bonus Idea

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

Ally, $ALLY, started higher in March and settled into consolidation in a triangle from June through to late August. It broke the triangle to the upside then, giving a target to 29.50. It spiked up to that target in mid-October and then turned into consolidation.

Last week it ended back at resistance. The RSI is moving higher in the bullish zone with the MACD crossing up and positive. The Bollinger Bands® are also opening higher. There is resistance at 30 and 32 then 33.25. Support lower comes at 29 and 28. Short interest is low at 2.5%.

The December options chain shows largest open interest at the 27 put strike and spread from 23 to 31, biggest there, on the call side. In the January chain it is big from 25 to 30 on the put side but biggest at 13. On the call side it is big from 20 to 35, biggest at 35. The March options cover the next earnings report and show the biggest open interest at 20 on the put side. It is biggest at 33 on the call side.

Ally, Ticker: $ALLY

Trade Idea 1: Buy the stock on a move over 30 with a stop at 28.

Trade Idea 2: Buy the stock on a move over 30 and add a December 29/27 Put Spread (65 cents) while selling a December 33 Call (49 cents).

Trade Idea 3: Buy the December/March 33 Call Calendar ($1.44) and sell the December 26 Put (35 cents) to lower the cost.

Trade Idea 4: Buy the March 25/30/33 Call Spread Risk Reversal for 25 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 heading into November options expiration, saw equity markets showing some rotation in leadership from the Nasdaq to the small caps.

Elsewhere look for Gold to consolidate in the uptrend while Crude Oil consolidates in a broad range. The US Dollar Index continues to drift at the low end of consolidation while US Treasuries trend lower. The Shanghai Composite looks to continue in consolidation while Emerging Markets consolidate are in an uptrend.

The Volatility Index looks to continue to drift lower making the path easier for equity markets to the upside. Their charts are holding firm, especially on the longer timeframe. On the shorter timeframe the IWM looks the strongest making a new all-time high with the SPY starting to move up as well. The QQQ seems stuck at the big round number in consolidation. 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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