Wells Fargo: 5 Bonus Trade Ideas
Dragonfly Capital | Sep 02, 2014 08:02AM ET
Here is your Bonus Idea with links to the full Top Ten:
Wells Fargo & Company (NYSE:WFC)
Wells Fargo had been pulling back in a falling channel since the beginning of June until it broke the downtrend higher a week ago. It has consolidated since then at the 50 day SMA and looks ready for a break higher. The RSI paused during the consolidation but was turning higher Friday with a MACD that is rising. The Bollinger bands are starting to open as well. A break higher carries a target on a Measured Move to 53.25, just above the previous high. There is resistance at 52.15 and 53. Support lower may come at 51 and 50.60 followed by 50.25 and 49.70. Open interest this week favors the 52 Strike if it holds up and 50 on a fall back.
Trade Idea 1: Buy the stock on a move over 51.70 with a stop at 51.
Trade Idea 2: Buy the September 5 Expiry 51.50 Calls (offered at 22 cents late Friday). Cheaper than a stop on the stock.
Trade Idea 3: Buy the September 5 Expiry 51.5/52 Call Spreads (18 cents). Capped profits but a 177% return if it is.
Trade Idea 4: Buy the September 51.5/52.5 Call Spreads (37 cents). Capped profits but a 170% return if it is.
Trade Idea 5: Buy the September 51.5/52.5 Call Spreads and sell the September 50 Puts (25 cents). Increases leverage in the Call Spread but requires margin for the short put.
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.
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