Top Trade Ideas for the Week of August 12, 2013: Bonus Idea

• Posted by Greg Harmon
• on August 12th, 2013

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

Microsoft, Ticker: $MSFT

Microsoft, $MSFT, is moving higher after consolidating the move lower after earnings. The Relative Strength Index (RSI) is testing the mid line and move through would turn bullish. The Moving Average Convergence Divergence indicator (MACD) is moving back higher already and crossed to positive. This supports more upward price action. There is a Measured Move higher to 34 on a move over resistance at 33 and then resistance higher at 35 and 36.5. Support lower is found at 31.50 and 31.

Trade Idea 1: Buy the stock on a move over 33 with a stop at 32.50.

Trade Idea 2: Buy the September 33 Calls (offered at 76 cents late Friday), on the same trigger.

Trade Idea 3: Buy the September 33/35 Call Spread (54 cents) on the same trigger.

Trade Idea 4: Buy the September/November 35 Call Calendar (18 cents) on the same trigger.

Trade Idea 5: Sell the August/September 31 Put Calendar (37 cents) on the same trigger.

Trade Idea 6: Buy the September 33/35/37 Call Butterfly (40 cents) on the same trigger.

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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 the dog days of August sees the market trend is firmly higher but consolidation is reigning. Look for Gold to continue to bounce in its downtrend while Crude Oil consolidates in its breakout higher. The US Dollar Index looks set to continue lower while US Treasuries bounce in the downtrend. The Shanghai Composite and Emerging Markets are poised to consolidate in their bounces in the downtrend with Volatility looking to remain low. This keeps the bias higher for the equity index ETF’s SPY, IWM and QQQ, but their charts suggest consolidation may continue. Use this information as you prepare for the coming week and trad’em well.

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