Top Trade Ideas For The Week Of September 26, 2016
Dragonfly Capital | Sep 26, 2016 01:59AM ET
Here are the Rest of the Top 10:
Endo International PLC (NASDAQ:ENDP)
Endo International fell from a plateau near 60 to start the year. It found support finally in May after an exhaustive gap down move and has drifted higher since. In August it moved higher on strong volume early in the month and then pulled back to fill the gap below. Now it is back at that prior high after a strong move Friday. Look for a push above resistance to participate to the upside. Momentum is bullish. The RSI is strong and rising fast while the MACD is crossing up. The move Friday is the start of a break out of very tight Bollinger Bands®. There is resistance at 24.10 and 26 followed by 29 and 32.75 before 34.50 and 40. Support lower comes at 22.40 and 19.75. Short interest is elevated at 6.9%. Enter long on a move over 24.10 with a stop at 22.40. As it moves over 25 move the stop to break even and then a $1 trailing stop over 25.10. Take off 1/3 on a stall at 40 or higher. As an options trade consider the October 24 Calls (offered at $1.30 late Friday) and trade them like the stock trade (using the stock price as a trigger, stop and target). Sell the October 20 Puts (30 cents) to lower the cost if you are comfortable owning the stock on a drop back to the 50 day SMA.
Fiesta Restaurant Group Inc (NASDAQ:FRGI)
Fiesta Restaurant Group, started lower in February 2015, finding support last November. That support lasted for 6 months before it fell again in May on heavy volume. It made new lows in June and bounced to resistance before falling back to the same support level. Now it is moving up again and pushing through that prior resistance. The RSI is in the bullish zone and the MACD is positive. Look for continuation to participate to the upside. The Bollinger Bands® have shifted higher as it lifts and there is resistance now at 28.50 and then to the gap fill at 32. Support lower comes at 25.50 and 24. Short interest is elevated at 6.9%. Enter long now (over 26) with a stop at 25.50. As it moves over 27 move the stop to break even. And then to a $1.25 trailing stop over 27.25. Take off 1/3 on a stall at 32 or higher. Options are too thinly traded to use.
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Jd.Com Inc Adr (NASDAQ:JD)
JD.com, $JD , has been a volatile stock. After a strong move lower to start the year it retraced most of the down leg by April. Then it fell again to a new low in June. Since then it has been rising. At the start of September it moved over its 200 day SMA in a pronounced way and has held there, consolidating under resistance. The RSI has turned back higher in the bullish zone and the MACD is curling back up. Look for a push over resistance to participate to the upside. That volatile action created a bearish Shark harmonic that has its first Potential Reversal Zone (PRZ) at 32, with the second PRZ at 35 above that. There is resistance at 27 and 28.25 followed by 30 and 33. Support lower comes at 25.60 and 25.30 followed by 24.80. Short interest is elevated at 7.8%. Enter long on a move over 27 with a stop at 25.50. As it moves over 28 move the stop to break even and then to a $1.50 trailing stop over 28.50. Take off 1/3 on a stall at 32 or higher and by 34. As an options trade consider the October 27 Calls (86 cents) and trade them like the stock trade. There is large open interest at the 25 Put Strike (30 cents) which might act as support if it pulls back, if you want to sell something to lower the cost.
Worthington Industries Inc (NYSE:WOR)
Worthington Industries had a long run higher until it found resistance in July. It has pulled back in a bull flag since then with a bigger dip into September. It started back higher off of the 100 day SMA in mid-September and is now pressing against falling resistance. The company reports earnings on Wednesday. Look for a push through resistance to participate to the upside. The RSI is bullish and rising and the MACD is crossed up, both bullish. There is resistance at 44.30 and 45.50. A Measured Move higher would give a target to 58. There is support lower at 42 and 40. Short interest is moderate at 5.2%. Enter long on a move over 44.30 with a stop at 42.75. As it moves over 45.50 move the stop to break even and then to a $2 trailing stop over 46.30. Take off 1/3 on a stall at 58 or higher. As an options trade consider the October 45 Calls ($1.55) and trade them like the stock trade. Sell the October 40 Puts (45 cents) as well for a bullish Risk Reversal.
Zions Bancorporation (NASDAQ:ZION)
Zions Bancorporation, $ZION , started the latest leg higher from a retest of support at 23.50 in July. The pullback from a peak at the start of September created a bull flag and the price broke that to the upside Friday. The RI is bullish and turning back higher while the MACD is level and stopped falling. Look for follow through to participate to the upside. The broad price action since November has created a Deep Crab harmonic pattern with a PRZ above at 38.30. Resistance stands at 31.10 followed by 32 and 33.10, then you have to go back to 2008 to find it at 34 and 37.50 before 44. Support lower comes at 29.80 and 29.50. Short interest is moderate at 5.7%. Enter long on a move over 31 with a stop at 29.50. As it moves over 32 move the stop to break even and then to a $1.25 trailing stop over 32.25. Take off 1/3 on a stall at 38.30 or higher. As an options trade consider the October 31 Calls (57 cents) and trade them like the stock trade.
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 week of September sees the Equity Indexes looking strong, especially on the longer timeframe.
Elsewhere look for Gold to move higher short term in consolidation while Crude Oil consolidates. The US Dollar Index also looks to continue to move sideways while US Treasuries are biased higher. The Shanghai Composite looks to drift higher while Emerging Markets are biased to the downside in the short term.
Volatility looks to remain at abnormally low levels keeping the bias higher for the equity index ETF’s SPY (NYSE:SPY), iShares Russell 2000 (NYSE:IWM) and PowerShares QQQ Trust Series 1 (NASDAQ:QQQ) . Their charts show strength in moving higher at the end of the week, especially in the longer timeframe. Use this information as you prepare for the coming week and trad’em well.
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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