Here is your Bonus Idea with links to the full Top Ten:
Schlumberger, NYSE:SLB, provides technology, project management and information solutions to the oil and gas exploration and production industry worldwide. The company is based in Paris, France but we cannot hold that against them; the stock market is about making money. Their stock was hit hard along with the shock to oil prices making a low in January 2105.
The price of the stock consolidated after the fall in a $10 range from 77.5 to 87.50 for 4 months, before starting higher in late March. It reached a peak at 95 in late April and has been pulling back in a falling wedge, very close to a bull flag. Should it break over this to the upside, it would target 103.50 on a Measured Move higher.
The momentum indicators are mixed with the RSI holding in the bullish zone. But the MACD has been falling, and is level now, almost ready for a bullish cross. A close look inside the wedge sees that there is a Golden Cross, with the 50 day SMA crossing up through the 200 day SMA, that happened Wednesday last week.
Resistance higher sits at 91.65 and 92.85, followed by 95 and 99.33. Support lower may come at 89.20 and then 87.60, followed by 86.15 and 83.40. Short interest is low at 1.2%. The company is expected to report earnings next on July 16th after the market closes.
Moving to the options chains, nearby open interest this week is biased to the upside with sizable numbers of contracts at 90 through 97.5 strikes, while the put side sees big open interest at 85, 87.5 and 90 strikes. Out in July, large open interest stands at the 85 Put Strike and then from 92.5 to 97.5 on the Call side.
Schlumberger
Trade Idea 1: Buy the stock on a move over 91.65 with a stop at 89.
A straight stock trade.
Trade Idea 2: Buy the stock with a long July 90/85 Put Spread ($1.58) short August 95 Call ($1.33 credit) collar.
Same as #1 but with options protection through earnings.
Trade Idea 3: Buy the July 90 Calls (offered at $2.50 late Friday) on the same trigger.
A defined risk way to participate in upside.
Trade Idea 4: Buy the July 90/95 Call Spread ($1.87) and sell the July 87.5 Put ($1.29 credit).
A levered trade with downside risk at 87.5 and capped upside, but still a 8:1 reward to risk ratio on a move higher.
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, heading into June Options Expiration week, sees the Equity markets looking weak in general short term.
Elsewhere, look for gold to continue lower while crude oil consolidates in the uptrend. The US dollar index is also in broad consolidation, but with a downward bias, while US Treasuries are trending lower, but might be ready for a bounce. The Shanghai Composite remains strong and rising, while Emerging Markets are biased to the upside short term in the downtrend.
Volatility looks to remain subdued, keeping the bias higher for the equity index ETF’s ARCA:SPY, ARCA:IWM and NASDAQ:QQQ. Their charts suggest that it will take some work for the SPY and QQQ, which look weak in the short term and flat intermediate, while the IWM trends higher. 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.