Top Trade Ideas for the Week of June 11, 2012: Bonus Idea

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

Target, Ticker: $TGT

Target, $TGT, broke through short term resistance Friday and is approaching a full retracement of the move lower through 2011. Building a very long Cup with Handle with a target of 64. The Relative Strength Index (RSI) is bullish and rising with a Moving Average Convergence Divergence (MACD) indicator that is positive and moving higher again, both supporting further upside. There is support lower at 58.20 and 57.10 followed by 56 and 54.80. Resistance higher comes at 63.10 and 65.70 back from 2007. Finally the 3 box reversal Point and Figure chart has a current price objective of 81. This is a bullish chart no matter how you look at it the only reason not to buy last week was all the uncertainty.

Trade Idea 1: Buy the stock on a move over 59.31 with a $1.25 trailing stop.

Trade Idea 2: Buy the July 60 Calls on a move over 59.31. These were offered at 1.03 Late Friday.

Trade Idea 3: Sell the July 55 Puts on the same trigger. For the premium seller, these were bid at 39 cents late Friday.

Trade Idea 4: Buy the July 55/60 bull Risk Reversal. Combining trades 2 & 3 these were offered at 64 cents late Friday.

Trade Idea 5: Buy the October 55/60 bull Risk Reversal. Giving it more time these were offered at 78 cents late Friday.

Trade Idea 6: Buy the January 2013 55/60 bull Risk Reversal. Giving it a lot more time to get to that Point and Figure target, these were offered at 70 cents late Friday.

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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 options expiration week the tone of the market has lightened but not quite turned bullish. Gold is back to being an enigma consolidating in the short term within the intermediate downturn in the long term upward trend while Crude Oil looks to head lower, perhaps consolidating in the very short term. Treasuries and the US Dollar Index look to further pullback or consolidate their recent gains in their uptrends. The Shanghai Composite is on the verge of a big move lower while Emerging Markets continue to consolidate in their downtrend, perhaps ready to reverse. The Volatility Index continues to be biased to the upside but not in a strong manner. These influencers create the environment for the Equity Index ETF’s SPY, IWM and QQQ to continue their bounce higher. Their charts are more cautious though with the SPY looking the best followed by the QQQ and finally the IWM. Once again the US Dollar Index and Treasuries will likely drive Equities, so a strong reversal back higher by either or both would change the equity bias back to bearish for the week. 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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