Top Trade Ideas for the Week March 30, 2015: Bonus Idea

• Posted by Greg Harmon
• on March 30th, 2015

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

Aetna, $AET, gets its name from the mountain pictured above. The stock broke over a double bottom in November. It pulled back to retest it is December and has move higher since. The price action from January made a rising wedge, which it broke to the upside in early March. Price pulled back from a high at 109.90 to retest the wedge and moved back higher Friday.

The RSI is holding firmly in the bullish zone with the MACD crossed down though. There is resistance at 109.90 and then free air and a Measured Move to 115.40. Support lower comes at 105.40 and 102 followed by 99.25. Short interest is low at 1.2%. The company reports earnings next April 23rd, before the market opens.

The stock has weekly options and for the April 2 Expiry Open Interest is spread well between 98.5 and 110. No real clues for this week. But the April monthly options chain shows much more Open Interest on the Call side withe biggest at the 110 Strike above.

Aetna, Ticker: $AET

Trade Idea 1: Buy the stock now against a stop at 105.40.

Trade Idea 2: Buy the April 2 Expiry 108 Calls (offered at 80 cents late Friday).
A cheap defined risk method for participating in a move higher.

Trade Idea 3: Buy the April 108 Calls ($1.67).
A cheap defined risk method for participating in a move higher, but with more time than #2

Trade Idea 4: Buy the April 108/110 Call Spread (79 cents).

Caps the upside return at the large open interest at 110 in April.

Trade Idea 5: Buy the April 108/110 Call Spread and sell the April 100 Put (48 cents).
Adds leverage to trade #4 at a good level to own the stock.

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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 Quarter end and a holiday shortened week the Equity markets look short term vulnerable in their long term uptrends.

Elsewhere look for Gold to try higher in its short term uptrend but with trepidation while Crude Oil consolidates back in a channel. The US Dollar Index may continue to consolidate in its uptrend with a bias higher while US Treasuries are biased lower as they consolidate. The Shanghai Composite looks better to the upside in its consolidation and Emerging Markets are biased to the downside in their broad consolidation.

Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts show a mixed bag with consolidation in the uptrends ion the longer timescale, with the IWM the strongest, while on the shorter timeframe the IWM and QQQ may reverse higher with the SPY still looking vulnerable. Use this information as you prepare for the coming week and trad’em 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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