4 Trades To Book A Trip Higher In Ctrip.com
Dragonfly Capital | Jul 24, 2017 07:28AM ET
Here is your Bonus Idea with links to the full Top Ten:
Ctripcom International Ltd (NASDAQ:CTRP), has been moving higher since coming out of a base in February. Then it pushed over the 50 and 20 day SMA’s and started up. The first resistance came later that month and it consolidated sideways until price ran into the 50 day SMA again. Then it moved higher again in April to a top in June. Another pullback to the 50 day SMA and it started higher again in July. Now it is at the June high and looking ripe for another flight higher.
The RSI is in the bullish zone to support more upside price action. The MACD is also rising and positive to support higher prices. The Bollinger Bands® are opened to the upside as well. A Measured Move higher would give a target to 63.25 on the next leg. There is resistance at 58.50 and then free air above. Support lower sits at 56.50 and 55.40 followed by 53.20 and 52. Short interest is elevated at 7% and the company is expected to report earnings next on August 9th.
The options chains show open interest focused at 56 this week. Next week it is biggest at 57 on the Put side. The August 11th chain, the first after the earnings report, is light but has biggest open interest at the 57 Call strike. The August monthly chain also has biggest open interest below at the 55 strike, but some size at 60 on the call side as well. Finally the September chain has biggest open interest at the 50 Put strike. Takeaway: options traders are surprised it is trading this high.
Ctrip, Ticker: $CTRP
Trade Idea 1: Buy the stock on a move over 58.50 with a stop at 56.
Trade Idea 2: Buy the stock on a move over 58.50 with a August 11 Expiry 58/55 Put Spread ($1.50) for protection through earnings and selling an August 60 Call ($1.05) to fund most of the cost of protection.
Trade Idea 3: Buy the September 55/60 bullish Risk Reversal (60 cents).
Trade Idea 4: Buy the August 4 Expiry/August 60 Call Calendar (90 cents) and sell the August 4 Expiry 56.50 Put (65 cents) to lower the cost.
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 with July Options Expiry and 1 full week of earnings behind them, sees the Index ETF’s looking strong and ready to move higher.
Get The News You Want
Elsewhere look for Gold to continue in its uptrend while Crude Oil pulls back lower in the short run within the longer term drift higher. The US Dollar Index continues to weaken and move lower while US Treasuries strengthen and move higher. The Shanghai Composite continues to drift up while Emerging Markets move higher with strength.
Volatility looks to remain at extremely low levels keeping the bias higher for the equity index ETF’s SPDR S&P 500 (NYSE:SPY), iShares Russell 2000 (NYSE:IWM) and PowerShares QQQ Trust Series 1 (NASDAQ:QQQ). In the short run their charts look to consolidate or pullback but all look strong and ready to continue higher in the longer timeframe. Use this information as you prepare for the coming week and trad’em 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.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.