Top Trade Ideas for the Week of May 14, 2012: Bonus Idea

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

Apple, Ticker: $AAPL

Apple, $AAPL, has been a huge topic of debate. Is it consolidating for a run higher or is it topping and ready for a major pullback? Even this weekend’s signal from the new StockTwits Heat Map shows it more discussed than JP Morgan, $JPM. Personally I do not care what the stock does but I am interested int he price action. With price currently sitting at support at 557, a break lower shows support at 548 and 523 before 515 and 492. It is also worth noting that a break lower sees relatively little previous price history to stop it until the 410 area. If support holds there is resistance higher at 578 and 595 followed by 620 and the previous high at 644. The Relative Strength Index (RSI) has held in bullish territory over 40 throughout this consolidation with a Moving Average Convergence Divergence (MACD) indicator trending higher. Truly a neutral view at this level.

Long Trade Ideas

Trade 1: Enter long on a move over 578 with a stop at 572. Convert the stop to a $7.50 trail on a move over 595 and take some profits at 620.

Trade 2: Buy the June 585/620 Call Spread on a move over 578. This was offered at $8.25 late Friday.

Trade 3: Sell the June 535/520 Put Spread on a move over 578. This was bid at $2.70 late Friday.

Trade 4: Buy the June 585/620 Call Spread selling the June 535/520 Put Spread on a move over 578. This was offered at $5.55 late Friday.

Short Trade Ideas

Trade 1: Sell the stock short on a move under 557 with a stop at 565. Convert the stop to a $7.50 trail on a move under 548 and take some profits at 523.

Trade 2: Buy the June 550/520 Put Spread on a move under 557. This was offered at $7.40 late Friday.

Trade 3: Sell the June 600/615 Call Spread on a move under 557. This was bid at $3.00 late Friday.

Trade 4: Buy the June 550/520 Put Spread selling the June 600/615 Call Spread on a move under 557. This was offered at $4.40 late Friday.

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If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits feed and on chartly.

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 after a dose of family for Mother’s Day the reality of a continued bearish bias will take hold. Gold and Crude Oil look better to the downside with the US Dollar Index and Treasuries looking to continue to strengthen. The bullish flirtation of the Shanghai Composite may be over while the pullback in Emerging Markets continues. The Volatility Index is building pressure to move higher as well. These influencers set a backdrop for the Equity Index ETF’s to continue to the downside. The chart of the QQQ agrees whole-heartedly while the SPY and IWM are mixed with the intermediate term view continuing to hold steady. New highs by Treasuries or the Dollar Index will likely knock everything lower, while a pullback in bonds and the Dollar would provide a floor. Use this information as you prepare for the coming week and trade’m 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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