Top Trade Ideas for the Week of June 3, 2013: Bonus Idea

• Posted by Greg Harmon
• on June 3rd, 2013

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

Amgen, Ticker: $AMGN

Amgen, $AMGN, broke support lower on Friday with a near Marubozu candle lower. The Relative Strength Index (RSI) is making a new lower low and under the 40 level with a Moving Average Convergence Divergence indicator (MACD) that is continuing lower after what could have been a reversal set up. Both support more downside. Short interest is light at less than 2%. There is support lower at 93.75 and 90.25 before 89 and a gap to fill to 86.50. Resistance higher comes at 103.75 and 108 followed by 111.50 and 113.60.

Trade Idea 1: Sell the stock short now using 103.75 as a stop.

Trade Idea 2: Buy the June 100 Puts (offered at $2.20 late Friday).

Trade Idea 3: Buy the July 100/90 Put Spreads ($2.85).

Trade Idea 4: Buy the July 100/90 Bearish Put Spread Risk Reversal selling the July 110 Calls ($2.65).

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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 June sees the markets ready to take a breather and perhaps pullback. Gold though is biased higher in the short term in its downtrend while Crude Oil heads toward the bottom of its range. The US Dollar Index and US Treasuries both look to continue lower. The Shanghai Composite maintains an upward bias but may consolidate first while Emerging Markets continue biased to the downside. Volatility looks to low but drifting higher keeping the long term bias higher for the equity index ETF’s SPY, IWM and QQQ, but maybe a drag in the short run. The index ETF’s themselves appear to be weakening in their uptrends with the SPY the weakest followed by the IWM and the QQQ still showing some strength in longer charts., Use this information as you prepare for the coming week and trad’em well.

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