Top Trade Ideas for the Week of April 2, 2012: Bonus Idea

• Posted by Greg Harmon
• on April 2nd, 2012

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

United Parcel Service, Ticker: $UPS

United Parcel Service, $UPS, is building a bull flag after a run higher out of consolidation near 77. It has a Relative Strength Index (RSI) that is bullish and currently pointing higher and Moving Average Convergence Divergence (MACD) indicator that is about to avert a bearish cross to negative with a glancing kiss. These support more upside. The Measured Move higher out of the flag takes it to 86.50 and there is no resistance along the way. The test lower Thursday last week filled the open gap to support at 79 with support lower at 77.25 and 76.

Trade Idea 1: Buy the stock on a move over 81 with a $1.50 trailing stop.

Trade Idea 2: Buy the April 82.5 Calls on a move over 81, offered late Friday at 34 cents.

Trade Idea 3: Sell the April 77.5 Puts on a move over 81, bid at 18 cents late Friday.

Trade Idea 4: Buy the April 77.5/82.5 Bull Risk Reversal on a move over 81, offered at 16 cents late Friday.

Trade Idea 5: Buy the May 77.5/82.5 Bull Risk Reversal on a move over 81, offered for free late Friday.

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After reviewing over 900 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 heading into the new Quarter finds many of the influencers are looking better to the downside in the short term. Gold and Crude oil are biased lower with in their long term and intermediate term uptrends. The US Dollar Index is also looking lower in the short run within an uptrend while US Treasuries just look lower. The Shanghai Composite looks to continue lower with Emerging Markets neutral with a chance to break lower. Volatility looks to continue to be tame and possibly move lower. These influencers give a backdrop for the US Equity Indexes SPY, IWM, QQQ, to continue higher and their charts agree but not so strongly in the short run. The QQQ continues to look the best with the SPY next, looking better higher with a chance of consolidation while the IWM continues to move sideways. Use this information as you prepare for the coming week and 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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