Jefferies Group (JEF) is consolidating at the previous highs near 19 after retracing a move lower to 11.50. The Relative Strength Index (RSI) is in bullish territory and has now worked off the technically overbought condition with a Moving Average Convergence Divergence indicator (MACD) that is negative but holding. The Measured Move on a break higher takes it to 22 and there is support lower at 18.35 and 17.30 followed by 16.
Trade Idea 1: Enter long on a move over 19 with a stop at 18.50.
Trade Idea 2: Buy the February 19 Calls (offered at 35 cents late Friday) on a move over 19.
Trade Idea 3: Buy the February 18/19 bull Risk Reversal (25 cents) on a move over 19.
Trade Idea 4: Enter short on a move under 18.35 with a stop at 18.80.
Trade Idea 5: Buy the February 18 Puts (25 cents) on a move under 18.35.
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 holiday week sees the markets continue to look bullish. Gold looks set to continue higher within the sideways channel while Crude Oil continues its rise.
The US Dollar Index seems content to move sideways while US Treasuries are biased higher in the downtrend. The Shanghai Composite and Emerging Markets are biased to the upside on a break of their recent consolidations. Volatility looks to remain low and biased to move lower keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. There seems to be some rotation from the IWM into the SPY and now the QQQ is clearly lagging in a consolidation zone, keep an eye on it. 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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