Top Trade Ideas for the Week of December 2, 2013: Bonus Idea

• Posted by Greg Harmon
• on December 2nd, 2013

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

Melco Crown Entertainment, Ticker: $MPEL

Melco Crown Entertainment, $MPEL, moved higher out of the ascending triangle over the summer to a consolidation zone over 33.20 support. Notice this move started when 3 of the Simple Moving Averages (SMA) were packed into a tight zone. Now it can be called breaking a descending triangle or more conservatively approaching resistance at 36.60. The Relative Strength Index (RSI) is holding over the mid line and may be turning up with a MACD that is crossing up and starting to rise. The total beak of resistance and a new high targets a price of 46 on a Measured Move higher. There is support lower at 33.20 and 31.40 followed by 30.60.

Trade Idea 1: Buy the stock now (over 35.50 with a stop at 34.80) or on a move over 36.60 with a stop at 35.50.

Trade Idea 2: Buy the December 36 Calls (offered at $1.00 late Friday) on a move over 36.

Trade Idea 3: Buy the January 36 Calls ($1.55) on a move over 36.

Trade Idea 4: Buy the December 36 /December 6th 36.50 Call Diagonal, buying the December monthly and selling the weekly (80 cents).

Trade Idea 5: Buy the January 36/December 37 Call Diagonal ($1.00).

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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 Friday which, as December begins, sees the markets are still strong but getting a bit extended on longer timeframes. Look for Gold to consolidate or continue lower in the downtrend while Crude Oil is biased lower but also may consolidate. The US Dollar Index seems content to move lower in the short term in the uptrend while US Treasuries are biased lower but nearing support. The Shanghai Composite and Emerging Markets are biased to the upside with a chance of Emerging Markets running in place. Volatility looks to remain low and may drift higher keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, but not as strong a breeze as has been blowing. Their charts show the IWM the strongest and the QQQ not far behind but a bit extended while the SPY shows the most signs of a stall or pullback. Use this information as you prepare for the coming week and trad’em well.
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