Top Trade Ideas for the Week of October 15, 2012: Bonus Idea

• Posted by Greg Harmon
• on October 15th, 2012

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

Amazon, Ticker: $AMZN

Amazon, $AMZN, has been the talk of market participants for over ten years. Overvalued, unsustainable business model, or disruptor and innovator. The stock price is now falling from a double top at 262 and moving toward support at 232. There is support lower at 213 and 207 followed by 197. The Relative Strength index (RSI) is now bearish and moving lower with a Moving Average Convergence Divergence indicator (MACD) that is negative and growing. Both support more downside. Resistance on a move back higher is found at 250 and 262. There is congestion as shown in the Volume at Price bars between 232 and 210 that can give support.

Trade Idea 1: Sell Short the stock with a stop at 250.

Trade Idea 2: Buy the November 240 Puts, offered at 10.80 late Friday.

Trade Idea 3: Buy the November 240/220 Put Spreads offered at 6.55 late Friday.

Trade Idea 4: Buy the November 240/220 1×2 Put Spread offered at 2.30 late Friday.

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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, sees heading into the October Options Expiration week markets looking bleak. Gold looks ready to continue lower in the short run while Crude Oil is biased higher. The US Dollar Index seems content to move sideways while US Treasuries are biased lower. The Shanghai Composite is biased to the downside with Emerging Markets looking to continue their consolidation at resistance. Volatility looks to remain subdued, keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, with the view from the Dollar and Treasuries supporting that as well. The charts of the Equity Index ETF’s don’t agree with this as the IWM and QQQ look solidly biased lower and only the SPY in consolidation. Use this information as you prepare for the coming week and trade’m well.

Dragonfly Capital Views Anniversary Celebration

For a limited time the Opportunity to join the Dragonfly Capital Views Premium Membership on an Annual basis is available for only $600.

This is 20% off of the standard annual subscription price and nearly 45% off of a rolling monthly membership! Don’t miss this limited opportunity! Ends at October Options Expiration.Sign up here.

Want to learn more about Dragonfly Capital Views?

Dragonfly Capital Views Performance Through September 2012 Expiry

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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