Top Trade Ideas for the Week of April 8, 2013: Bonus Idea

• Posted by Greg Harmon
• on April 8th, 2013

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

Occidental Petroleum, Ticker: $OXY

Occidental Petroleum, $OXY, is consolidating a mvoe higher at the 200 day Simple Moving Average (SMA) in a bull flag. It has a rising and bullish Relative Strength INdex (RSI) and a Moving Average Convergence DIvergence indicator (MACD) that is rising. Both support more upside. A break of the high at 82 over the 200 day SMA opens a Measured Move higher to 86.80, with resistance at 84.80 along the way and at 88 above it. There is also a small gap between 81.94 and 82.26. Support lower is found at 79.30 and 77.60 followed by 74.66.

Trade Idea 1: Buy the stock on a move over 82.26 with a stop at 81.

Trade Idea 2: Buy the stock (81.85) and sell the April 12 Expiry 82.50 Calls (Offered at 63 cents late Friday), a Buy-Write, for a potential 1.6% gain in a week.

Trade Idea 3: Buy the April Monthly 82.50 Calls ($1.03) on a move over 82.26.

Trade Idea 4: Buy the April 12 weekly/April monthly 82.50 Call Calendar selling the April Monthly 85 Call (9 cents).

Trade Idea 5: Sell the April 12 weekly 82.5/May 85 Call Diagonal, selling April and buying May, and selling the May 87.5 Call (26 cent credit).

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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 Saturday which heading into next week sees the markets decidedly weaker but not giving up yet. Look for Gold to continue to bounce toward 1600 while Crude Oil moves higher in its triangle consolidation. The US Dollar Index looks to pullback in the uptrend while US Treasuries are back in the consolidation zone and biased higher. The Shanghai Composite and Emerging Markets remain biased to the downside. Volatility looks to remain contained keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, but all look better to the downside on a very short term basis, with the QQQ strongest on the weekly timeframe. Use this information as you prepare for the coming week and trad’em well.

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