- Posted by Greg Harmon
- on October 11th, 2021
Here is your Bonus Idea with links to the full Top Ten:
Ford, $F, made a top in June and then went through a long shallow pullback. It bottomed in August and started to round higher. Last week it made a higher high after a higher low, confirming an uptrend. The Bollinger Bands® are shifted higher and open. The RSI is rising and on the edge of overbought with the MACD positive and climbing.
There is resistance at 15.50 and 16.35, then 17.70 from 2014 and 2013, followed by 18.70 from 2011 and 2002 before 19.20 from 2001. Support comes at 14.65 and 14.10 then 13.35. Short interest is low at 2.4%. The stock does not pay a dividend and the company is expected to report earnings next on October 27th. The October options chain show biggest open interest at the 14 and 12 strikes on the put side and much larger at the 15 then 14 strike on the call side.
The October 29 Expiry has open interest spread from 14.50 to 13 on the put side and building from 13 to a bigger peak at 15.50 on the call side. The November options show biggest open interest at the 14 put then tailing to 11 and focused at 14 on the call side. Finally, the December chain has biggest open interest at the 13 put and sees it build from 13 to a peak at 16 on the call side.
Ford, Ticker: $F
Trade Idea 1: Buy the stock on a move over 15.50 with a stop at 14.50.
Trade Idea 2: Buy the stock on a move over 15.50 and add an October 29 Expiry 15/14 Put Spread (36 cents) while selling the December 17 Call (37 cents).
Trade Idea 3: Buy the October 29 Expiry/December 16 Call Calendar (38 cents).
Trade Idea 4: Buy the December 13/16/18 Call Spread Risk Reversal (15 cents).
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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 October options expiration week, saw equity markets showed some resilience with a rebound in the larger cap markets.
Elsewhere look for Gold to continue in consolidation while Crude Oil drives higher in the uptrend. The US Dollar Index continues to drift to the upside while US Treasuries pullback in a downtrend. The Shanghai Composite looks to continue the sideways motion while Emerging Markets trend to the downside.
The Volatility Index looks to remain at moderate levels reducing the downward pressure on equity markets. The SPY and QQQ charts look strong on the longer timeframe and may be ready to reverse higher again on the shorter timeframe. The IWM however continues to churn marking time sideways in a nine month channel. Use this information as you prepare for the coming week and trad’em well.
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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.