Top Trade Ideas: Week Of February 25, 2013

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

Visa, Ticker: V


Visa held up very well in last week’s brief two day pullback. The Relative Strength Index (RSI) held in bullish territory and has done so over the 2 month long consolidation over 154.66. it has been the Moving Average Convergence Divergence indicator (MACD) that has been diverging, pointing lower. That may be about to change with the histogram about to cross to positive. The stock price also made contact with the 50 fay Simple Moving Average (SMA) last week before moving higher. It has resistance at 160 and 162.50 but a move over 161 breaks the flag higher towards a Measured Move target of 168.66.

Trade Idea 1: Buy the stock on a move over 161 with a stop at 157.

Trade Idea 2: Buy the March 160 Calls (offered at $2.40 late Friday) on a move over 161.

Trade Idea 3: Buy the March 160/165 Call Spreads ($1.72) on a move over 161.

Trade Idea 4: Sell the March 150 Puts ($0.53) on a move over 161.

Trade Idea 5: Buy the March 160/165 Call Spreads selling the March 150 Puts in a Call Spread Risk Reversal ($1.19) on a move over 161.

Trade Idea 6: Buy the March/April 165 Call Calendars ($1.47) on a move over 161.

Trade Idea 7: Buy the March/April 165 Call Calendars selling the March 150 Put ($0.94) on a move over 161.

Trade Idea 8: Buy the March/April 165 Call Calendars selling the April 150/145 Put Spread ($0.91) on a move over 161.

Trade Idea 9: Buy the March/April 165 Call Calendars selling the April 150 Put (15 cent credit) on a move over 161.

Trades 4, 5, 7, 8 and 9 require margin use or the ability to enter into cash protected put sales.

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, moving into the last week of February saw the markets give a wake up call, but then hit the snooze button. Gold is the exception testing long term support while a Crude Oil pulls back in the uptrend. The US Dollar Index looks to continue its move higher with US Treasuries consolidating in the short term downtrend. The Shanghai Composite and Emerging Markets are biased to the downside as well. Volatility looks to remain low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The charts show potential for a short term pullback in the SPY and IWM but the longer term looks to the upside. This pullback could be triggered by a continued strong rise in the US Dollar through the nearby major resistance, Gold and Oil turning long term bearish, or Treasuries reversing higher. The QQQ however looks to be comfortable back in its channel within the long term consolidation. Its eventual breakout could be the key to the long term market direction. Use this information as you prepare for the coming week and trad’em well.

Disclosure: 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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