Here is your Bonus Idea with links to the full Top Ten:
Chevron (NYSE:CVX), stock price rose out of consolidation around $100 at the beginning of November, prior to the election. It continued higher to a top in December and paused into year end. With the change in the calendar the stock started lower. It gapped down at the end of January and then paused again until a pronounced move lower began in March. The fall turned into a consolidation in April with an eventual bottom near a 78.6% retracement of the up leg at the start of June.
The price broke above consolidation 2 weeks ago and the quickly fell back. This time it found support at the 50 day SMA, a higher low, and reversed back higher. It ended the week Friday at the cross of the 100 and 200 day SMA’s, above the consolidation zone and at the earlier break out high. The strong candle supports more upside and so does the RSI rising in the bullish zone and the MACD crossed up, positive and rising. Even the Bollinger Bands® are opening higher to allow a run higher.
The Measured Move gives a short term target to 111.80 on this leg. There is resistance at 108.50 and 109.60 followed by 111 and 114 before 115 and a gap fill to 116.50 then the prior top at 119. Support lower comes at 107.40 and 106 then 104 and 102.70 and 100. Short interest is low at 1.2% and the company is expected to report earnings next July 28th.
The options chain expiring this week shows strong open interest on the call side at both the 108 and 110 strikes. On the put side the biggest is at 104 below. In the July monthly options the biggest open interest is at the 110 call strike and both the 105 and 110 put strikes. For the July 28th expiry there is little open interest but the biggest above at 111 and 112 on the call side. August open interest is bigger on the call side and focused at 105 and 110 with smaller put open interest at 100 and 105.
Chevron, Ticker: $CVX
Trade Idea 1: Buy the stock on a move over 108.50 with a stop at 106.
Trade Idea 2: Buy the stock on a move over 108.50 and add a July 28 Expiry 108/103 Put Spread ($1.57) for protection, selling the September 115 Calls (77 cents) to lower the cost.
Trade Idea 3: Buy the July 110 Calls ($1.20) and sell the July 105 Puts (77 cents) for a bullish Risk Reversal.
Trade Idea 4: Buy the July 14 Expiry/July 28 Expiry 110 Call Calendar (78 cents) and sell the July 14 Expiry 106 Puts (75 cents).
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 saw with Options Expiration and the June FOMC meeting in the rear view mirror, equities looking to emerge on the other side mainly unscathed. There is consolidation in the SPDR S&P 500 (NYSE:SPY) and iShares Russell 2000 (NYSE:IWM) but perhaps more damage in the PowerShares QQQ Trust Series 1 (NASDAQ:QQQ).
Elsewhere look for Gold to continue to pullback while Crude Oil trends lower. The US Dollar Index has moved to consolidation in its pullback while US Treasuries are biased to continue higher. The Shanghai Composite and Emerging Markets are biased to the upside with the Chinese market drifting up, while Emerging Markets consolidate in their longer trend up.
Volatility looks to remain at abnormally low levels keeping a breeze at the backs of equities. Their charts show continued strength in all 3 Index ETF’s on the longer timeframe but consolidation in the SPY and pullbacks in the IWM and QQQ on the shorter timeframe. Use this information as you prepare for the coming week and trad’em well.
DISCLAIMER: 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.