Here is your Bonus Idea with links to the full Top Ten:
Aetna (NYSE:AET) broke over a double bottom in November. It pulled back to retest it is December and has move higher since. The price action from January made a rising wedge, which it broke to the upside in early March. Price pulled back from a high at 109.90 to retest the wedge and moved back higher Friday.
The RSI is holding firmly in the bullish zone with the MACD crossed down though. There is resistance at 109.90 and then free air and a Measured Move to 115.40. Support lower comes at 105.40 and 102 followed by 99.25. Short interest is low at 1.2%. The company reports earnings next April 23rd, before the market opens.
The stock has weekly options and for the April 2 Expiry Open Interest is spread well between 98.5 and 110. No real clues for this week. But the April monthly options chain shows much more Open Interest on the Call side withe biggest at the 110 Strike above.
Aetna: AET
- Trade Idea 1: Buy the stock now against a stop at 105.40.
- Trade Idea 2: Buy the April 2 Expiry 108 Calls (offered at 80 cents late Friday).
A cheap defined risk method for participating in a move higher.
- Trade Idea 3: Buy the April 108 Calls ($1.67).
A cheap defined risk method for participating in a move higher, but with more time than #2 - Trade Idea 4: Buy the April 108/110 Call Spread (79 cents).
Caps the upside return at the large open interest at 110 in April. - Trade Idea 5: Buy the April 108/110 Call Spread and sell the April 100 Put (48 cents).
Adds leverage to trade #4 at a good level to own the stock.
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