Bonus Trade Idea For The Week Of February 19

Here is the Bonus Idea with links to the full Top Ten:

Network Appliance, Ticker: NTAP

Network Appliance, (NTAP), broke above an expanding wedge in late January. It pulled back on a retest last week and held, moving back higher Friday. The Measured Move higher takes it to 40. It has support for more upside from a rising and bullish Relative Strength Index (RSI), and a Moving Average Convergence Divergence indicator (MACD) that is moving towards a cross to positive. There is resistance at 37 and 38.40 followed by 41. Support lower is found at 35 and 32.25 followed by 30.25.

Trade Idea 1: Buy the stock on a move over 37 with a 65 cent trailing stop.

Trade Idea 2: Buy the March 37 Calls (offered at $1.03 late Friday) on a move over 37 and trade them like the stock trade.

Trade Idea 3: Buy the March 37/40 Call Spreads (77 cents) on a move over 37 and trade them like the stock trade.

Trade Idea 4: Sell the March 32 Puts (15 cents) on a move over 37 and trade them like the stock trade.

Trade Idea 5: Buy the March 37/40 Call Spreads selling the March 32 Puts (62 cents) on a move over 37 and trade them like the stock trade.

Trade Idea 6: Buy the March/April 39 Call Calendars (46 cents) on a move over 37 and trade them like the stock trade.

Trade Idea 7: Buy the March/April 39 Call Calendars selling the April 32 Puts (4 cents) on a move over 37 and trade them like the stock trade.

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 Saturday, which heading into the President's Day shortened week sees that Gold looks to continue lower toward the bottom of the long term channel as Crude Oil consolidates in the move higher. The US Dollar Index continues towards a test of the top of a broad consolidation with US Treasuries consolidating but biased lower. The Shanghai Composite is biased to the upside and Emerging Markets are biased to the downside short term in their rising trend. Volatility continues to be a no factor creating an environment for the equity index ETF’s SPY, IWM and QQQ, to move higher. Their charts agree, all with a bias higher, with the IWM strongest followed by the SPY and then the QQQ. A hard reversal on Treasuries on major move higher from the US Dollar seem to be the only outside influencers that could derail the equity move higher. 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.

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