Top Trade Ideas for the Week of July 16, 2012: Bonus Idea

• Posted by Greg Harmon
• on July 16th, 2012

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

CF Industries, Ticker: $CF

CF Industries, $CF, is in a quandry. It may be falling from a double top near 203, or it may be consolidating for a move higher after a second touch there. The Relative Strength Index (RSI) is bullish and holding at a very positive level, with a Moving Average Convergence Divergence indicator (MACD) that is at zero and debating a cross to negative. Support lower is found at 190 and 175 before 160. The 3-box reversal Point and Figure (PnF) chart carries a price objective of 260 and there is a Measured Move over 203 to 230. The bias is to the upside but it could move either way.

Long Ideas

Trade Idea 1: Buy the stock on a move over 203 with a $5 trailing stop. Take off 1/3 at 230.

Trade Idea 2: Buy the August 210 Calls (these were offered at $3.70 late Friday) on a move over 203 using a price of 198 in the stock as a stop. Spread them against the August 230 Calls on a touch at 215 to take back your premium.

Trade Idea 3: Sell the August 165 Puts ($1.42) on the trigger over 203.

Trade Idea 4: Buy the August 165/210 bull Risk Reversal ($2.28) on a move over 203.

Short Ideas

Trade Idea 1: Sell the stock short on a move under 189 with a $3 trailing stop.

Trade Idea 2: Buy the August 185 Puts ($5.60) on a move under 189.

Trade Idea 3: Buy the August 185/165 Put Spread ($4.18) on a move under 189.

Trade Idea 4: Sell the July/August 190/185 Put Diagonal Spread ($3.90) on the same trigger under 189.

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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 new week sees a bit of a positive tone but with a diverging inter-market macro view. Gold and Crude Oil look to continue their trends lower but with consolidation or a short term rise. The US Dollar Index and Treasuries both look to continue higher. The Shanghai Composite looks to continue lower while Emerging Markets follow Equities drifting higher. The Volatility Index looks to remain subdued and may even move lower. This creates the mixed view with Treasuries and the Dollar support downside for Equities while Volatility allows for a further rise. The charts of the Equity Index ETF’s, SPY, IWM and QQQ, all look better to the upside in the short term within broad consolidation or bear flags. Use this information as you prepare for the coming week and trade’m well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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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