Here is your Bonus Idea with links to the full Top Ten:
Northrup Grumman, $NOC, has been soaring in 2017. And since it crossed the 50 day SMA in April it has done nothing but move higher. Last week it pulled back to touch that 50 day SMA again and held. In fact the strong move down Wednesday followed by a doji Thursday and then a higher close Friday, a Morning Star pattern, confirms a reversal to the upside. It also gives a good support level to trade against.
The RSI is also turning back higher as it holds in the bullish zone. The MACD continues to head lower, but remains positive. A Reversal in it soon would be very positive. There is support at 265 and then 261, but we really are not interested below 265. Resistance higher sits at 268 and 274. Short interest is low under 1% and the company is expected to report earnings next on October 25th.
The September options chain shows the biggest open interest below on the put side from 265 to 260. The October chain is not as deep but focused around the 275 Call strike. The October 27 Expiry options, the first after the report have only been active 2 days and show only a small 265/260 Put Spread. But the November options are biggest at the 265 Call Strike and 250 on the Put side.
Northrop Grumman Corporation (NYSE:NOC)
Trade Idea 1: Buy the stock now (over 265) with a stop at 265.
Trade Idea 2: Buy the stock now (over 265) and add an October 27 Expiry 265/260 Put Spread ($2.60). Sell the November 280 Call ($2.80) to pay for the protection.
Trade Idea 3: Buy the September 22 Expiry/October 270 Call Calendar ($2.95).
Trade Idea 4: Buy the October 260/270/275 Call Spread Risk Reversal (20 cent credit).
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 the joy in the equity markets that was there when the week started fade to just a subtle fist pump at the end of the holiday shortened week.
Elsewhere look for Gold to continue in its uptrend while Crude Oil pulls back in its move higher. The US Dollar Index continues to melt down while US Treasuries are biased to the upside. The Shanghai Composite is pausing in its break out and Emerging Markets are biased also consolidating at long term resistance in their uptrend.
Volatility looks to remain low keeping the bias higher for the equity index ETF’s SPDR S&P 500 (NYSE:SPY), iShares Russell 2000 (NYSE:IWM) and PowerShares QQQ Trust Series 1 (NASDAQ:QQQ). Their charts show some short term retrenchment as they hit highs, while the long term rising trend remains unperturbed. 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.