Top 5 Trade Ideas: Week Of December 24, 2012
Dragonfly Capital | Dec 25, 2012 01:27AM ET
Halliburton (HAL) has been moving up off of a higher low at 29.75 since mid November. After a healthy pullback to the 50 day Simple Moving Average (SMA) it made a leap higher and ended the week consolidating at 35.40. A break of the consolidation higher carries a Measured Move to 38, near the September high.
The Relative Strength Index (RSI) is bullish and the Moving Average Convergence Divergence (MACD) indicator is positive and growing, both supporting further upside. Resistance comes at 36.90 and 37.90 followed by 38.76 and 39.88. Support lower is found at 34 and 32.90 followed by 31.75, 31 and 29.75.
Trade Idea 1: Buy the stock on a move over 35.40 with a stop at 35.
Trade Idea 2: Buy the January 35 calls (offered at 91 cents late Friday) on the same trigger.
Trade Idea 3: Sell the January 31 Puts (20 cents) on the same trigger.
Trade Idea 4: Buy the January 31/35 bullish Risk Reversal (71 cents) combining trades 2 and 3, on the same trigger.
Trade Idea 5: buy the January 36/38/39 broken wing Call Butterfly (35 cents), buying the 36 and 39 strikes and selling 2 of the 38 strikes, on the same trigger.
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 Original post
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