Top Trade Ideas for the Week of June 17, 2013: Bonus Idea

• Posted by Greg Harmon
• on June 17th, 2013

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

Covidien, Ticker: $COV

Covidien, $COV, is moving higher off of support at 63.50. Two strong white Marubozu candles to end the week were reinforced by a Relative Strength Index (RSI) that is rising and making new higher highs as it verges on a move into bullish territory. The Moving Average Convergence Divergence indicator (MACD) has crossed higher and is rising. These support more upward price action. There is resistance at 67 and 68.60 and then free air higher. Support comes lower at 63.50 and 61.70.

Trade Idea 1: Buy the stock now (over 65.50) with a stop a 64.90.

Trade Idea 2: Buy the July 65 Calls (offered at $2.15 late Friday) on the same trigger.

Trade Idea 3: Buy the July 65/70 Calls ($1.95) on the same trigger.

Trade Idea 4: Buy the July 65/70 Call Spread selling the July 62.5 Puts ($1.50) on the same trigger.

Trade Idea 5: Buy the July 62.5/67.5 bullish Risk Reversal (45 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 next week looks for Gold to consolidate with a downward bias while Crude Oil moves higher. The US Dollar Index and US Treasuries look to continue lower. The Shanghai Composite and Emerging Markets are also biased to the downside. Volatility looks to remain low but slowly trending higher making the bias lower for the equity index ETF’s SPY, IWM and QQQ, in the short run. Their charts also show signs of a pullback with than SPY and QQQ both weaker than the IWM. Use this information as you prepare for the coming week and trad’em 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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