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Four Ways to Profit from Mastercard: Bonus Idea

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This article is published in collaboration with Scutify, where you can find real-time markets and stock commentary from Robert Marcin, Cody Willard and others. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

Here is your Bonus Idea with links to the full Top Ten:

Mastercard, $MA, has been moving higher since breaking out of a symmetrical triangle to start September. The target on the move higher is to 124. The stock did run higher and met some resistance at 113 in March. It consolidated there through to the latter part of April when it jumped higher. That move ended with a Shooting Star May 2nd and reversed lower. Last week it hit the 20 day SMA and stopped falling. Friday it had a strong up day, suggesting a possible reversal.

Momentum also is looking up as the RSI turned back higher and the MACD is leveling in positive territory after a shallow pullback. Here is your opportunity to enter. There is resistance at 118.50 and then free air above. Support lower comes at 116 and 113 then 110. Short interest is low under 1%. The company does not report earnings next until July 27th and expect it to go ex-dividend in early July.

The May options chain has large open interest above at 119 and 120 on the call side. But it also has big open interest at 115 and then 110 on the put side. The June chain is tight on both sides between 115 and 120. On the July chain open interest is big from 110 to 120 on the call side with smaller amounts lower on the put side. And the September options, the first after the next earnings report, show biggest open interest at the 125 call.

Mastercard, Ticker: $MA

Trade Idea 1: Buy the stock now (over 116) with a stop at 115.

Trade Idea 2: Buy the stock now (over 116) and add a September 115/110 Put Spread ($1.59) while selling the September 125 Call ($1.62 credit) to fund it.

Trade Idea 3: Buy the September 120/125 Call Spread ($1.90) and sell the September 105 Put ($1.27 credit) to fund it.

Trade Idea 4: Buy the September 115/June 23 Expiry 120 Call Diagonal ($5.50) and sell the June 23 Expiry 113 Puts ($70 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 May options expiration, sees the equity markets looking mixed with strength in the QQQ and exhaustion in the IWM and SPY.

Elsewhere look for a possible reversal higher in the Gold downtrend while Crude Oil consolidates. The US Dollar Index looks to continue the drift lower while US Treasuries are biased lower in consolidation, but show the possibility of a reversal short term. The Shanghai Composite is trending lower but also showing signs of a possible reversal while Emerging Markets continue to roar higher.

Volatility looks to remain at exceptionally low levels keep the wind at the backs of the equity index ETF's SPY, IWM and QQQ. Their charts show continued strength in the QQQ with consolidation in the SPY and IWM. Use this information as you prepare for the coming week and trad'em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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.


This article was written by Greg Harmon for Dragonfly Capital on May 15, 2017.

This article published in collaboration with Scutify, the best app for traders and investors. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

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