Top Trade Ideas for the Week of March 18, 2013: Bonus Idea

• Posted by Greg Harmon
• on March 18th, 2013

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

Cisco Systems, Ticker: $CSCO

Cisco Systems, $CSCO, has been floating like a butterfly. And exhibiting a Bearish Butterfly Pattern with a Potential Reversal Zone at 22.45. A more traditional view shows a move higher out of a bull flag Friday with a target of 23. The Relative Strength Index (RSI) is bullish and rising and the Moving Average Convergence Divergence indicator (MACD) is rising, both supporting further upside price action. There is resistance at 23.69 and 24.20, both from 2010. Support lower comes at 21.50, 20.80 and 20.50 followed by 19.40.

Trade Idea 1: Enter long on a move over 22 with a 2.0% trailing stop.

Trade Idea 2: Buy the April 22 Calls (offered at 35 cents late Friday) on a move over 22.

Trade Idea 3: Buy the April 22/23 Call Spread (29 cents) on a move over 22.

Trade Idea 4: Buy the March 22 Expiry 22.5 Calls (3 cents) as a lottery ticket.

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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 the equity markets are becoming mixed. Outside influencers see Gold continuing to hold a range with an upside bias for any break out while Crude Oil slowly grinds higher. The US Dollar Index looks ready to pullback in the uptrend while US Treasuries are biased lower. The Shanghai Composite and Emerging Markets are biased to the downside in the near term. Volatility looks to remain non-existent keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their chats are a mixed bag with the IWM the strong est followed by the QQQ building potential energy and the SPY perhaps ready to pullback or consolidate. If the US Dollar Index and Treasuries continue lower this will be a big tailwind for Equities. Use this information as you prepare for the coming week and trad’em 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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