Top Trade Ideas for the Week of October 17, 2011: The Rest

• Posted by Greg Harmon
• on October 16th, 2011

Here are the Rest of the Top 10:

Caterpillar, Ticker: $CAT

Caterpillar, $CAT, moved higher Friday failing to confirm the potential reversal signals from Wednesday’s Evening Star and Thursday’s Hanging Man candles, and finishing over the 50 day Simple Moving Average (SMA). As it moves higher the Relative Strength Index (RSI) is rising and approaching 60 and the Moving Average Convergence Divergence (MACD) indicator is increasing, both supporting more upside. Caterpillar reports earnings October 24th.

CBOE Holdings, Ticker: $CBOE

CBOE Holdings, $CBOE, confirmed the double Evening Star combination with a lower close and a Bearish Engulfing candle Friday. The RSI rolling over after on reaching the low 50’s and the MACD losing strength as it reaches zero, both confirm and support weakness and lower prices. Look for a retracement lower.

ConocoPhillips, Ticker: $COP

ConocoPhillips, $COP, jumped higher Friday finishing at the high with a near Marubozu candle. The move took it over the previous resistance between 68.35-68.75. The RSI is rising and the MACD is increasing supporting more upside as it gets into the range from the previous channel. this name reports earnings on October 26th.

Hi Tech Pharmacal, Ticker: $HITK

Hi Tech Pharmacal, $HITK, is making a triple top near 35 after running higher from the 50 day SMA. The RSI is rising and remained bullish in the last pullback while the MACD is about to cross positive. Both support a punch through higher. There is over 10% short interest in this name which could create a short squeeze higher as well.

Verizon Communications, Ticker: $VZ

Verizon Communications, $VZ, is nearing the top of a nearly year long channel between 33 and 37.50. As it reaches the top it has a RSI that is bullish and rising and a MACD that is increasing, both supporting more upside. The price action taking it higher is also positive as it has created a series of higher highs and higher lows off of the bottom in August. If it can get above 37.50 it has clear air. It did pint a doji star candle Friday, signaling a potential reversal, if confirmed lower though. It reports earnings on Friday, October 21st.

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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 looks for Gold to continue in its consolidation with a slight bias to an upside break, while Crude Oil continues higher with resistance nearby. Both the US Dollar and US Treasuries look poised to continue their recent moves lower. The Shanghai Composite and Emerging Markets also look to continue their recent moves higher but with resistance near and within the downtrend. Volatility appears to be receding and combined with the falling US Dollar and US Treasuries provides a solid background for Equity Index ETF’s, SPY, IWM and QQQ to move higher. 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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