Here is your Bonus Idea with links to the full Top Ten:
Intel (NASDAQ:INTC), has rounded out of a long bottom after the dotcom crash and is now trading at 16 year highs. But that move higher had only retraced 38.2% of the drop as of mid-September, still a long way to go. It has moved out of consolidation in September to a higher high and met resistance last week as it touched 40, the round number. The initial pullback was shallow, only to 39 before a reversal Friday back higher.
A Measured Move higher targets 42. The RSI has reset from an overbought condition with the MACD also pulling back and crossing down. The Bollinger Bands® continue to point higher. And there is resistance at 40 and then 41 and 43.25 before 46.90. Support lower sits at 39 and 38 then 37.50 and 37 before 36.50. Short interest is low at 2.5% and the company is expected to report earnings October 26th.
The October options chain shows almost all of the open interest below price, and indication of pressure lower. The October 27 Expiry, after earnings, is lighter but has open interest focused at 38.5 and 39 on the put side and from 38 to 40 on the call side. The ATM straddle suggests a $1.65 move by Expiry so a range of 38 to 41.25. In November the options show very large size at the 40 call and also at 42 with December not as strong.
Intel, Ticker: $INTC
Trade Idea 1: Buy the stock on a move over 40 with a stop at 39.
Trade Idea 2: Buy the stock on a move over 40 with a October 27 Expiry 39.5/38 Put Spread (54 cents) and then selling the December 42 Call (39 cents) to pay for most of the protection.
Trade Idea 3: Buy the October/December 40 Call Calendar (86 Cents).
Trade Idea 4: Buy the December 37/40 Bull Risk Reversal (65 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 October Options Expiration sees the equity markets are all at record highs and looking strong.
Elsewhere look for Gold to continue higher in the short term while Crude Oil also slowly grinds its way up. The US Dollar Index may be pausing in the longer downtrend while US Treasuries are strong and rising short term. The Shanghai Composite and Emerging Markets both look to continue to move higher in slow fashion.
Volatility looks to remain at very low levels keeping the bias higher for the equity index ETF’s SPY (NYSE:SPY), IWM and QQQ. Their charts agree completely on the longer timeframe. And all 3 look good on the shorter timeframe with the QQQ benefiting from short term consolidation in the IWM. 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.