Top Trade Ideas for the Week of June 6, 2011: The Rest

Here are the Rest of the Top 10:

Analog Devices, Ticker:$ADI

Analog Devices fell through the 50 and 100 day Simple Moving Averages (SMA) Friday. With a Relative Strength Index (RSI) pointing lower and a Moving Average Convergence Divergence (MACD) indicator growing more negative it looks to have more downside. If it gets under 39 which has been previous support then it can bleed lower to support at 38 followed by 37 and then 36.30. A stop can be placed near 39.47.

Finisar, Ticker:$FNSR

Finisar has had a run lower and is now hovering just above support at 21.10. If it falls under 21.10 then the next level of support is at 20 followed by 18.65. Both the RSI and MACD support more downside. Short interest is high at over 10% so a 21/18 Put Spread makes sense to limit risk of a short squeeze. The June 21/18 Put Spread closed Friday at 1.15 and the July at 1.25. I will be looking at the July Put Spread on a break of 21.10.

Anheuser-Busch InBev, Ticker:$BUD

Anheuser-Busch InBev bounced off of support of the 23.6% Fibonacci level at 58.56 Friday and is back at the 50 day SMA at 59.48. If it can get over 59.50 then it has resistance at 61 followed by 62.76 and then 63.50. Look for a MACD cross up to confirm the move and use a stop near 58.56.

Diamond Foods, Ticker:$DMND

Diamond Foods had a bad week falling nearly 10% printing a long shadowed small body candle with large volume to end the week at previous support. The RSI tanking and MACD crossing negative suggest that there is more downside to come. If it gets under 68 then it has has support next at 66 followed by 62.40 and then 59.40. A stop can be place near 70. Short interest is huge near 30% so you might take a flyer with June 65 Puts for 65 cents if you think it will move fast.

Valeant Pharmaceuticals International, Ticker:$VRX

Valeant Pharmaceuticals International is approaching the 54 to 54.15 area for the fourth time from successively higher lows. Friday it closed on the high with a rising RSI and MACD suggesting it could try to break the top this week. If it gets over 54.15 then it has a series of Measured Moves (MM) to 58 then 60 and 65.

The First 5

Up Next: Bonus Idea

(As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

After reviewing over 800 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 looks to continue the trend higher for Gold with Crude Oil drifting sideways to slightly higher. The US Dollar Index should continue lower while US Treasuries remain in an uptrend but with a potential reversal looming. The Shanghai Composite could continue its flag or head lower while Emerging Markets continue their flag or head higher. Volatility should remain subdued but start to watch for a break of 21.25 to change that. The Equity Index ETF’s, SPY, IWM and QQQ are all on the same page again and look lower. Use this information to understand the major trend and how it may be influenced as you prepare for the coming week ahead. 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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