Before ER Options 4/18–4/22/16

April 17, 2016

This week doesn’t look as promising for bulls as last week. Many of the charts analyzed this weekend show as overbought or undecided. The before ER strategy shines when the company targeted has much ER buzz, either good or bad, and when the chart analysis shows a clear trend change. Please keep that in mind when looking at option suggestion charts this week.

What follows are option charts for underlying stocks with ER this week. CCI, MACD, ADX/DMI, and Bollinger Bands are my preferred technical analysis mix. Don’t underestimate the volume either. I’ve annotated vertical blue lines to show when the indicators are signaling buy on the option charts that follow. We want to see a rising CCI from 0, rising MACD over the threshold and above the MA line, and +DM rising and above -DM.

Industry Outlook

Last week Services, Utilities, and Industrial Goods were up while Basic Materials and Financials were down. I expect the three industries up last week to continue this week. Basic Materials and Financials were up well the past few weeks so profit taking was expected, and I expect the trend to continue this week.

Don’t forget to see how $SPY is doing. SPY is an ETF that invests in the NASDAQ top 100 stocks. Back in February the double bottom pattern competed and be resulting text book uptrend has occurred since. My indicator mix is showing weakness in the uptrend starting. The 6-month chart shows the next resistance at $211 so we could still see some upward movement until then, but I won’t be surprised to see the uptrend fail soon.

Economic Calendar

This week’s economic calendar is pretty quiet. Tuesday housing starts are reported in the U.S. while Russia reports its unemployment globally. Wednesday is the existing home sales report and UK unemployment report. Wednesday is the LEI report and Eurozone ECB meeting. Thursday ends the week with Canada’s CPI report.

Before ER Options 4/25–4/29/16

Please read my ER strategy post to understand this trading strategy before utilizing.

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