Here is your Bonus Idea with links to the full Top Ten:
Express Scripts Holding Co (NASDAQ:ESRX), started heading lower in August 2016. It fell along trend resistance starting in December last year and continued until it broke that trend line in September this year. The break was short lived though and the stock fell to a lower low in October. Since then it has moved higher and last week made a higher high as it crossed the 200 day SMA for the first time in almost a year. It ended the week at a higher high and just short of the June peak.
The RSI is rising and bullish with the MACD rising and positive. The Bollinger Bands® are opening to allow a move to the upside. There is resistance at 65.80 and 67.20 followed by 69 and a gap to fill to 70.10 then 72 and 73.40 before 77.25. Support lower sits at 62.50 and 60.20 then 59 and 56. Short interest is moderate at 5.6%. The company is expected to report earnings next on February 12th.
The December options chain shows large open interest at the 62.50 and 60 strikes on the put side, with some size art 63 and 61.50 as well. On the call side it is focused at 62.50 and 65. In January the open interest is extreme at the 52.50 call strike, and on the call side it is biggest from 60 to 70. The February options, the first to expire after the next earnings report, are still building with the biggest at the 55 put and the 67.50 call.
Express Scripts, Ticker: $ESRX
Trade Idea 1: Buy the stock on a move over 66 with a stop at 63.
Trade Idea 2: Buy the stock now (over 64) and add a December 64/62.50 Call Spread ($1.10) selling the January 70 Call (60 cents) to fund most of it.
Trade Idea 3: Buy the December /January 65 Call Calendar ($1.10) and sell the December 61.50 Put (70 cents) to lower the cost.
Trade Idea 4: Buy the February 60/65/70 Call Spread Risk Reversal (80 cents).
After reviewing over 1,000 charts, I have found some good setups for the week. This week’s list contains the first five below to get you started early. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the first week of December sees the equity markets looking strong on the longer timeframe after weathering a short term shock Friday.
Elsewhere look for Gold to consolidate under 1300 while Crude Oil consolidated in its uptrend. The US Dollar Index is marking time with a bias to the downside while US Treasuries consolidate in the range in place since September. The Shanghai Composite is also moving sideways with a bias for a pullback while Emerging Markets retrench in their uptrend.
Volatility looks to remain low but may creep up removing some support for equities. The equity index ETF’s SPY (NYSE:SPY), iShares Russell 2000 (NYSE:IWM) and PowerShares QQQ Trust Series 1 (NASDAQ:QQQ) show unfettered uptrends on the weekly charts. On the daily charts they may need a breather after the intraday shock Friday. Use this information as you prepare for the coming week and trad’em well.
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.