- Posted by Greg Harmon
- on January 10th, 2022
Here is your Bonus Idea with links to the full Top Ten:
Boeing, $BA, has been moving lower in a channel since March last year. What makes it interesting is that last week it confirmed a double bottom as it moved over the December bounce high. It is settling at resistance at a higher high after a higher low, an uptrend. The Bollinger Bands® are pointing to the upside.
The RSI is rising into the bullish zone with the MACD positive and moving higher. There is resistance at 218 and 228 then 233 and 240. Support lower comes at 211.50 and 206.50 then 200. Short interest is low at 1.8%. The stock does not pay a dividend. The company is expected to report earnings on January 26, 2022.
The January options chain show big open interest at 210 and then 220 and 200 puts and at the 220, 210 and 240 calls. The January 28 Expiry has biggest open interest at the 210 and 205 put strikes and sees it build from 200 to a peak at 225 and 235 on the call side. The February chain has biggest open interest at the 240 strike on both sides.
Boeing, Ticker: $BA
Trade Idea 1: Buy the stock on a move over 218 with a stop at 212.
Trade Idea 2: Buy the stock on a move over 218 and add a January 28 Expiry 215/205 Put Spread ($4.10) while selling a February 240 Call ($2.90).
Trade Idea 3: Buy the January/February 230 Call Calendar ($4.00) and sell the January 28 Expiry 200 Put ($2.15).
Trade Idea 4: Buy the February 200/220/240 Call Spread Risk Reversal (40 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 with the first week of 2022 in the books, saw equity markets show some short term weakness.
Elsewhere look for Gold to consolidate while Crude Oil continues to move higher. The US Dollar Index continues to pause in consolidation in the uptrend while US Treasuries continue a short term downtrend. The Shanghai Composite looks to consolidate while Emerging Markets continue the move lower.
The Volatility Index looks to remain low and in the normal range making the path easier for equity markets to the upside. Their charts continue to show strength on the longer timeframe but with short term weakness. The SPY looks the strongest of the three but in a pullback short term. The QQQ has now joined the IWM in building a consolidation zone, sitting at the bottom of it, while the IWM itself remains in the 11 month range. 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.