5 Trade Ideas For BlackRock
Dragonfly Capital | Dec 05, 2016 07:39AM ET
Here is your Bonus Idea with links to the full Top Ten:
BlackRock Inc (NYSE:BLK), started higher in February, with an initial run that found resistance in April at 365. It built an expanding wedge over the next 3 and a half months. With a failed break down along the way, before pushing to a new higher high in August. That led to some consolidation as well for 2 months before another break down. This one was to a higher low, but both break downs pierced the 200 day SMA before reversing higher.
The last leg higher found resistance at the prior high and consolidated again for a couple of weeks. Thursday last week it pushed to a new high but reversed back into consolidation Friday. Where will it go from here? Momentum indicators are not telling. The RSI is in the bullish zone but moving sideways. The MACD is flat but crossed down. Bullish but possibly turning. The Bollinger Bands® are starting to squeeze. This could go either way.
A Measured Move to the upside would give a target to 403. But failure and a push lower could go all the way to 340 without breaking the long term uptrend. There is resistance at 377 and then free air higher. Support lower comes at 365 and 360 followed by and 351 before 337. Short interest is low at 1.5%, and the company is expected to report earnings next on January 12th.
The December options chain show large open interest at the 360 Call Strike, and almost all of the open interest on the put side lower than the current price. January options show large open interest at the 320 and 330 Strikes on the Put side and spread from 340 to 400 on the Call side. In April the open interest is still building.
BlackRock, Ticker: BLK
Trade Idea 1: Buy the stock on a move over 377 with a stop at 365.
Trade Idea 2: Buy the January 380/400 Call Spread ($6.25) and sell the January 340 Puts for $$2.85
Trade Idea 3: Sell the stock short on a move under 365 with a stop at 377.
Trade Idea 4: Buy the January 360/340 Put Spread $5.40.
Trade Idea 5: Sell the January 340/400 Strangle for a $3.00 credit.
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 heading into the last month of the year sees the equity markets retrenching from their post-election moves, with shallow pullbacks at this point.
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Elsewhere look for Gold to continue in its downtrend while Crude Oil moves higher. The US Dollar Index continues to mark time, moving sideways, while US Treasuries are biased to continue lower. The Shanghai Composite is on a trend higher that looks to continue while Emerging Markets consolidate at resistance with a bias to the downside.
Volatility looks to remain low 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). Their charts are mixed again, with the longer timeframe better for all 3, but the shorter timeframe showing weakness. All 3 ended the week with indecision candles though so the retrenchment may end soon. Use this information as you prepare for the coming week and trad’em well.
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