4 Trade Ideas In Danaher

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

Danaher (NYSE:), moved higher out of consolidation in January. It continued until it topped in March almost 13% higher. From there it fell back and then bounced off of resistance several times before a decline under the 200 day SMA in July. It bottomed in August and has been moving higher ever since. Last week it made a higher high and then pulled back to that prior resistance zone now acting as support.

Friday it printed a bullish engulfing candle, and should it continue higher there is a target to 96. The RSI has reset from an overbought condition, remaining bullish. The MACD is pulling back but looking like it may avoid a cross down. There is resistance at 87 and then 88.25 and nothing above that. Support lower sits at 86.25 and 85.25 followed by 84. Short interest is low under 1%. The stock begins to trade ex-dividend on September 28th and the company is expected to report earnings next on October 19th.

The October options chain shows the highest open interest at the 85 and 90 Call Strikes, bracketing the price. It also implies an expected move in the price between now and expiry of over $4.00 or a range of 82.50 to 91. The December options have large open interest at the 87.50 Call.

Danaher, Ticker: $DHR

DHR Daily Chart

DHR Daily Chart

Trade Idea 1: Buy the stock on a move over 87 with a stop at 85.50.=

Trade Idea 2: Buy the stock on a move over 87 with an October 85/82.5 Put Spread (60 cents) for protection through earnings. Sell an October 90 Covered Call (25 cents) to cover most of the cost.

Trade Idea 3: Buy a November 82.5/90 bullish Risk Reversal (5 cents).

Trade Idea 4: Buy the October/December 90 Call Calendar ($1.05) and sell the November 80 Put (65 cents).

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 as the calendar turns to fall sees the equity markets continuing to look strong on longer timeframes but with some short term rotation out of the and into the as the end of the 3rd quarter approaches.

Elsewhere look for to continue its pullback while pauses in its uptrend. The also is moving sideways but in its downtrend while US Treasuries see their uptrend at risk. The is marking time in its uptrend while Emerging Markets slowly grind higher.

Volatility looks to remain at very low levels keeping the bias higher for the equity index ETF’s SPDR (NYSE:), iShares Russell 2000 (NYSE:) and PowerShares QQQ Trust Series 1 (NASDAQ:). The IWM is leading the charge now, disregarding the old adage to sell Rosh Hashanah, with the SPY consolidating and the QQQ looking a little tired. Use this information as you prepare for the coming week and trad’em well.

DISCLAIMER: 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.

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