Here is your Bonus Idea with links to the full Top Ten:
Expedia (NASDAQ:EXPE), has been in a long uptrend since March. The gap higher in May was backfilled with a touch at support and a hammer reversal candle in June before a run higher. That move up has consolidated, created a Cup and Handle pattern. With a move over resistance the pattern would target a move to 118.
The momentum indicators are supportive of a move higher. The RSI is rising and bullish with the MACD flat after a pullback, but looking to move higher now. The Bollinger Bands® also are opening higher to allow a move.
There is resistance at 111.25 and then 113.45 before free air above and the Measured Move from the pattern to 118. Support lower comes at 109 and 107 followed by 104.60. Short interest is high at 9.1%. The company is expected to report earnings next July 30th.
Looking at the options chains shows the weekly July 2 Expiry options with moderate open interest below at 105 and 106. But the July monthly options favor the Call side with large open interest at the 110, 115 and 120 Call Strikes.
Expedia
Trade Idea 1: Buy the stock on a move over 111.25 with a stop at 109.
A straight stock trade.
Trade Idea 2: Buy the stock on a move over 111.25 with a July 31 Expiry 111/106 Put Spread short July 31 Expiry 118 Call collar for free.
Protecting the stock trade through the earnings report and retaining upside to the target.
Trade Idea 3: Buy the July 111/115 Call Spread (offered at $1.70 late Friday) and trade them like the stock trade.
Using options to define your risk and participate in upside in the short term to the high open interest above.
Trade Idea 4: Buy the July 111/115 Call Spread and sell the July 109 Puts for free.
Adding leverage to the options trade to finance the trade, with risk under 109.
Trade Idea 5: Buy the July 111/115/119 Call butterfly and sell the July 108 Puts for free.
Gives a little more downside protection but with risk on the upside if the 115 strike is exceeded.
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 holiday shortened week sees the equity markets continuing to look better on the longer timeframe with some vulnerability on the short timeframe.
Elsewhere look for gold to continue consolidation with a downward bias while Crude Oil consolidates with an upward bias. The US Dollar Index continues to move sideways in broad consolidation after the uptrend while US Treasuries are biased lower. The Shanghai Composite may finally be in the long awaited correction while Emerging Markets are biased to the downside.
Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s ARCA:SPY, ARCA:IWM and NASDAQ:QQQ. Their charts continue to show the SPY and QQQ moving similarly on the shorter timeframe while the IWM was stronger until late in the week. The rotation may be starting out of the small caps again. 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.