Yum! Brands: 5 Bonus Trade Ideas
Dragonfly Capital | Sep 22, 2014 07:57AM ET
Yum! Brands Inc (NYSE:YUM)
Yum Brands is testing resistance at the zone between 72.80 and 73.30 in a tightening ascending triangle. This happens to be at the 50 day SMA now and the Bollinger bands are very tight. This is often a precursor to a move. The RSI is making a new higher high as it moves up into the bullish zone with a MACD that is rising. A break of resistance carries a target to 78. There is resistance at 73.85 and 76.43 with a gap to fill to 77.05 and then 81 and another gap to fill to 82.56 with 83.40 above that. Support lower comes at 71.30 and 69.75 followed by 68.25. Short interest is low at under 2% and there is large option open interest this week at the 75 Call Strike.
Trade Idea 1: Buy the stock on a move over 73.30 with a stop at 72.
Trade Idea 2: Buy the September 26 Expiry 73.5 Calls (offered at 38 cents late Friday).
Trade Idea 3: Buy the September 26 Expiry 73.5/75 Call Spread (31 cents).
Trade Idea 4: Buy the September 26 Expiry 73.5/75 1×2 Call Spread (24 cents).
Trade Idea 5: Buy the September 26 Expiry 73.5/75 Call Spread and sell the September 26 Expiry 71.5 Put (13 cents).
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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