Trade Ideas — $MKC, $CAG, $PAYX, $AEP, $PCLN, $DUK

June 26, 2016

Need some trading ideas to get the week started? We’ve got you covered! This is our weekly issue June 27— July 1 where we go over macro economics, economic calendar, upcoming earnings and list a few trade ideas.

Economic News

In the US home sales posted were strong pointing to a bright spot in the US economy. Durable goods are still weak in the business investment area and Brexit is yet another catalyst for possible declines. In the US, Brexit should have little effect on the economy.

Globally, Brexit is expected to cause the UK to go into recession. The effects of Brexit are still being discussed as to the global effects directly and indirectly.

Economic Calendar

In the US, GDP, Consumer Confidence, Personal Income and Spending, Pending Home Sales, ISM Manufacturing, and Construction Spending are expected to be reported.

Globally, Argentina GDP, China Manufacturing PMI, Japan CPI, and Brazil Industrial Production will be reported.

Earnings Calendar

We’re getting close to the earnings season starting for 2nd quarter. Some before ER suggestions have been made below but watch option volume.

Markets

The US stock market responded to Brexit last week with strong declines. Look for UK related stocks to continue there decline. Volatility is expected until direct effects in the near term end.

Analysts have the US in the mid-economic growth stage. Industrials and Information Technology sectors do well in the mid stage. I liken our current sectors performance to the late-economic stage where Energy, Healthcare, and Materials do best with Consumer Staples and Utilities to heat up in the final recessionary stage.

General Note

With the U.K. leaving the EU many analysts expect short-term selling and volatility in most stock markets.

$SPY is at an important $203 support. Expected volatility may keep trading in the $203-$211 range for June end.

$MKC — McCormick and Company, Incorporated

$MKC has been on a string uptrend since late April. Some breaks above the resistance of the price channel have occurred. The touch to support last Friday should see a bounce to resistance as ER approaches and trading within the price channel.

Catalyst- ER 6/30/16.

Trade

BUY $100.00 July 15, 2016 Calls. 6/24 $2.60x $3.70. Watch option volume.

$CAG — ConAgra Foods, Inc.

$CAG’s 1-year high ended as the Brexit became reality last Friday. Support should hold in the $45.50 area allowing a nice Call entry before ER should support hold.

Catalyst- ER 6/30/16.

Trade

BUY $46.00 July 15, 2016 Calls. 6/24 $1.90x$2.25.

$PAYX — Paychex, Inc.

The news is aglow with growth prospects for $PAYX. The ER bar is set comparable with quarter 3's expectations. Nice volume occurred in last Friday’s trading as the $53.50 support area held.

Catalyst- ER 6/30/16.

Trade

BUY $55.00 July 15, 2016 Calls. 6/24 $.95x$1.10.

$AEP — American Electric Power Co., Inc.

$AEP has a strong resistance of $67.25. Oil’s price is approaching oversold with volatility in the markets expected in the short-term could push oil to 52-week highs.

Catalyst- Technical trade with the Energy sector rebounding.

Trade

BUY $67.50 July 15, 2016 Calls. 6/24 $1.05x$1.20.

$PCLN — The Priceline Group Inc.

$PCLN’s price makes wide changes quickly. The $1,232 support area has been strong since mid-February. Support was tested last Friday in a very fast way. Next resistance is $1,360.

Catalyst- Technical trade. Oversold technically with support touch.

Trade

BUY $1,360.00 July 15, 2016 Calls. 6/24 $4.50x$5.30.

$DUK — Duke Energy Company

Utilities should continue to uptrend until the Recession stage is reached in the economic cycle. Profit taking last week netted $XLU Put gains. $DUK has turned a resistance into support at the $81 area. Watch the $83 resistance as oil tried to make new highs this week.

Catalyst- Technical and sector trade.

Trade

BUY $82.50 July 15, 2016 Calls. 6/24 $1.30x$1.45.

Happy trading!