Top Trade Ideas for the Week of March 19, 2012: Bonus Idea

• Posted by Greg Harmon
• on March 19th, 2012

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

ConocoPhillips, Ticker: $COP

ConocoPhillips, $COP, is in a bull flag between 76 and 78 after rising from 67.50 and through previous resistance at 73.00. Note that the move took 1 month to complete. The Relative Strength Index (RSI) is bullish and turning back higher, creating a 7 day Positive Reversal with a target of 78.31. The Moving Average Convergence Divergence (MACD) indicator has been trending lower as the flag continues and is now negative. looking to the left of the chart shows that there is no resistance higher over 78 ad below 76 has a relative void of previous volume, which could let if fall through to 75.26 quickly. There is a target higher on a Measured Move to 88 on a break above the flag. Support can be found below at 73 and 71.10 followed by 69.45 and 67.50. The trend is higher.

Trade Idea 1: Buy the stock on a move over 78.15 with a $1 trailing stop.

Trade Idea 2: Buy the April 80 Calls on a move over 78.15.
These were offered at 43 cents late Friday.

Trade Idea 3: Sell the April 72.50 Puts on a move over 78.15.
These were bid at 34 cents late Friday.

Trade Idea 4: Buy the April 80/72.50 bullish Risk Reversal on move over 78.15.
Combining trades 2 and 3 for a net debit of 9 cents.

Trade Idea 5: Buy the May 80/72.50 bullish Risk Reversal on move over 78.15.
Same trade as #4 but giving an extra month to work out and can be done for free.

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After reviewing over 900 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 seems the market has provided some clarity. Gold looks to continue lower while Crude Oil consolidates with an upward bias. The US Dollar Index looks better to the upside but Treasuries now are solidly biased lower. The Shanghai Composite look lower while Emerging Markets are poised to break higher out of a consolidation zone. The Volatility Index added some spice to the part and does not look to move markedly higher some. These influencers build a backdrop for the US Equity Index ETF’s SPY, IWM and QQQ to continue higher. An acceleration of Treasuries lower will only reinforce this. The charts of those Index ETF’s agree with the SPY and QQQ looking the strongest and the IWM still working off some previous price history. 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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