Priceline (PCLN) broke above the descending wedge after reporting earnings and has been using the top of the wedge as support since. The Relative Strength Index (RSI) is bullish but falling and the Moving Average Convergence Divergence indicator (MACD) is positive but fading towards a cross.
Now at the 50 day Simple Moving Average (SMA) and printing back to back doji there is a trade opportunity. Resistance higher is found at 650 and fills a gap at 672.76, with resistance higher at 693. Support lower is found at 612 and a gap to 586.84 followed by 555. Use the reaction to the wedge and 50 SMA as the trade trigger.
Long Trades:
Trade 1: Buy the stock on a move over 625 with a $12 trailing stop.
Trade 2: Buy the December 625 Calls (offered at $16.50 late Friday) on the same trigger.
Trade 3: Buy the November 625/640 Call Spreads ($3.40) on a move over 622.
Trade 4: Buy the December 625/640 Call Spreads ($6.20) on a move over 622.
Trade 5: Buy the December 625/640 Call Spreads selling the November 605 Puts ($1.50) on a move over 622.
Short Trades:
Trade 1: Sell the stock on a move under 605 with a $12 trailing stop.
Trade 2: Buy the December 600 Puts ($15.20) on a move under 605.
Trade 3: Buy the November 600/580 Put Spreads ($2.90) on a move under 605.
Trade 4: Buy the December 600/560 Put Spreads ($10.30) on a move under 605.
Trade 5: Buy the December 600/560 Put Spreads selling the December 630/640 Call Spreads ($6.20) on a move under 605.
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 shortened Thanksgiving shows signs of a bottom, but not any reason to buy yet. Gold looks lower within the neutral long-term channel while Crude Oil is biased higher in the consolidation.
The US Dollar Index looks to continue higher while US Treasurys may be ready for a pullback in the uptrend. The Shanghai Composite and Emerging Markets are biased to the downside. Volatility looks to remain low with an upward bias keeping the bias lower for the equity index ETF’s SPY, IWM and QQQ, despite the potential reversal candles on their charts. Use this information as you prepare for the coming week and trade’m 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.
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