Here is your Bonus Idea with links to the full Top Ten:
Aflac Incorporated (NYSE:AFL), had a steep drop in August as the market fell. It recovered slowly over the next 3 months, exactly like the market adage, take the stairs up, and the elevator down. That high to start December was a marginally higher high, but this time the stock seemed to take the stairs down. It slowly fell over six weeks to make a slightly higher low in February. Higher high and higher low = Uptrend? Does not appear that way so far in this stock.
What may be more interesting to view over this time period is the role the 200 day SMA has been playing. It was support in July but since the fall in August it seems to act as a midpoint in an oscillation of price action. Falling lower, then being pulled back up and overshooting to be pulled back down and overshoot to the downside. With the rise off of the February low is it ready to overshoot to the upside again?
Looking at the other details of the chart suggest that it might be. The RSI is rising and bullish while the MACD continues higher. Both support the upside continuing. A move through the current resistance zone has resistance higher at 62.70 and 64.60 followed by 66. Support lower comes at 61 and 59.70 followed by 58.65 and 56.50.
The options chains show some potential for the price to stay at 60 for the next two weeks, or at least return there at Expiry. The big open interest at the 60 Strike Call in March dwarfs that at all other strikes in March on both sides. In April it shifts up to the 62.50 strike. And in May, beyond the April 22nd earnings report, the biggest open interest is at 65. Steady progress higher. And the past pace higher would look for a top somewhere between the April and May Expiry.
Aflac, Ticker: AFL
Trade Idea 1: Buy the stock on a move over 61.60 with a stop at 60.50, just under the 200 day SMA.
Trade Idea 2: Buy the March/April 62.5 Call Calendar (66 cents) and sell the April 57.5 Put (48 cents) for 18 cents.
Trade Idea 3: Buy the May 60/65 Call Spread ($2.26) and sell the May 57.5 Put ($1.07) for $1.19.
Trade Idea 4: Buy the April 60/62.5/65 Call Butterfly ($1.09) and sell the April 57.5 Put (48 cents) for 61 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 heading into the next week sees the equity markets on the verge of a major reversal higher.
Elsewhere look for Gold to continue higher in its uptrend along with Crude Oil. The US Dollar Index looks weak short term in consolidation while US Treasuries are biased lower. The Shanghai Composite and Emerging Markets are biased to the upside in the short run. Volatility looks to continue toward the normal range with a bias lower, adding a breeze to the backs of the equity markets.
The equity index ETF’s SPDR S&P 500 (NYSE:SPY), iShares Russell 2000 (NYSE:IWM) and PowerShares QQQ Trust Series 1 (NASDAQ:QQQ), look better to the upside, with the SPY and IWM showing strength in break a range higher, while the QQQ lags behind but also looks better to the upside. 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.