Top Trade Ideas for the Week of August 7, 2011: Bonus Idea

• Posted by Greg Harmon
• on August 7th, 2011

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

Northern Oil and Gas, Ticker: $NOG

Northern Oil and Gas reports earnings on Monday, and they typically report prior to the market open. Make sure that they have reported before entering this trade. As it approaches earnings it is sitting on support at 18 with a Relative Strength Index (RSI) that has been heading steadily lower and just pierced the 30 level. The Moving Average Convergence Divergence (MACD) indicator is growing more negative and the volume is increasing. If it breaks under 18 then the next support level is at 17, followed by 16.16 and then 14.80. If it holds and starts to move higher then there is resistance at 19.15, followed by 20.9 and then 21.30. There is high short interest in this name, near 40%, so a move higher could gain some momentum quickly. This also means that if the short trade presents itself then it may be better played with options. The August 18 Strike Puts last traded at 1.05 Friday and if that is too expensive, spreading them against the August 16 Strike Puts which last traded for 55 cents can defray the cost.

The Best

The Rest

(As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

After reviewing over 800 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 Saturday which looks for Gold ready to consolidate, if only for a couple days within the uptrend while Oil may consolidate before continuing the fall. The US Dollar Index looks to drift higher in the 73 to 76 range while US Treasuries pullback. The Shanghai Composite appears headed lower toward support and Emerging Markets may consolidate or bounce a bit before doing the same. The spike in Volatility looks to have more room to the upside but shows signs of pulling back at least early in the week. The Equity Index ETF’s SPY, IWM and QQQ appear set to bounce early next week, but the SPY and IWM charts look broken on many timeframes and headed lower. The QQQ is a bit of an enigma as it has maintained a hold at support. The QQQ’s continuing to hold and move higher would be a signal that the broad downturn may be ending. On the other hand if the SPY and IWM continue lower as expected in the intermediate term the QQQ will likely join them lower. Use this information to understand the major trend and how it may be influenced as you prepare for the coming week ahead. Trade’m well

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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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