Here is your Bonus Idea with links to the full Top Ten:
Walmart (NYSE:WMT), $WMT, made a high in January and stated to move lower. It started to slow the pace in March and eventually found a bottom in May. It slowly rose out of that in June and accelerated with a gap up in August. It has digested that move since, holding just under 100. This is a Cup and Handle pattern and a break to the upside would give a target to 118.
The RSI is rising in the bullish zone again and the MACD is crossed up and positive, both support a push higher. There is resistance at 97.70 and 100 then a gap to fill to 103 followed by 105 and 109.70. Support lower comes at 94.50 and 93.15 then a gap to fill to 90.50. Short interest is low at 1.4% and the company is expected to report earnings next on November 15th. The stock pays a dividend, currently measured at a 2.14% yield, and it will begin trading ex-dividend on December 6th.
The November 9 Expiry options chain has largest open interest at the 97 call strike and there is some at the 94 put as well. The November monthly options, covering the earnings report, have largest open interest by far at the 100 call strike. December options show a plateau from 95 to 105 on the call side. January options are also biggest at the 100 call.
Walmart, Ticker: $WMT
Trade Idea 1: Buy the stock on a move over 97.70 with a stop at 96.
Trade Idea 2: Buy the stock on a move over 97.70 and add a November 97.50/92.50 put spread ($1.70) as protection, selling a December 100 call ($2.08) to pay for it.
Trade Idea 3: Buy the November 97.50/100 call spread ($1.10) and sell the November 92.50 put for 11 cents.
Trade Idea 4: Buy the November/January 100 call calendar ($1.17) and sell the November 92.50 put for 18 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 as the October Options Expiry passes saw equities end a week of failed hopes as they rose off of the lows only to fall back by the end of the week.
Elsewhere look for Gold to move higher while Crude Oil continues lower in the short term. The US Dollar Index shows no signs of moving out of consolidation while US Treasuries are moving back lower. The Shanghai Composite continues to look awful as it makes new 4 year lows while Emerging Markets may be pausing in their downtrend.
Volatility pulled back slightly but remains above the longer term steady levels, keeping some pressure on the equity index ETF’s SPY (NYSE:SPY), IWM and QQQ. Their charts still show damage and little effort to get out of it. Short run reversals at the end of the week will likely bring on more bearish sentiment over the weekend. Use this information as you prepare for the coming week and trad’em well.
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.