4 Trade Ideas for Philip Morris: Bonus Idea
Philip Morris, $PM, started moving higher in October off of a low. It continued to a retest of the July high and stalled there. After a minor pullback it went back to retest resistance and pulled back in a shallow move. Now it is pressing through resistance. The longer view shows this area to be major resistance for the past 2 years and around a 38.2% retracement of the full drop from the 2017 high.
The RSI is rising in the bullish zone with the MACD moving up and bullish on both timeframes. There is resistance at 90 and 91.50 then 95.50 and 101.75 before 109.50. Support lower comes at 89 and 87.440 then 86.85 and 85.50. Short interest is low under 1%. The stock pays a dividend with an annual yield of 5.22%. It began trading ex-dividend December 18th. The company is expected to report earnings next on April 16th.
The February 28 Expiry options chain shows the biggest open interest lower at 87.50 on the put side and 85.50 on the call side. The March options chain has open interest building from 85 down to a peak at 72.50 on the put side. On the call side it is much bigger and found at 90 and 95. The May chain, the first to cover the earnings date, has biggest open interest on the put side at the 80 strike. On the call side it is biggest at the 95 strike.
Philip Morris, Daily, Ticker: $PM
Trade Idea 1: Buy the stock on a move over 90.25 with a stop at 86.
Trade Idea 2: Buy the stock on a move over 90.25 and add a March 87.50/85 Put Spread (86 cents) while selling the May 97.50 Calls (59 cents).
Trade Idea 3: Buy the March/May 92.50 Call Calendar ($1.33) and sell the March 85 Put (72 cents).
Trade Idea 4: Buy the May 82.50/90/95 Call Spread Risk Reversal (51 cents).
Philip Morris, Weekly, Ticker: $PM
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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 February options expiration ended, and one week left in the month, saw equity markets starting to move lower.
Elsewhere look for Gold to continue its strength while Crude Oil creeps higher in consolidation. The US Dollar Index remains in an uptrend despite Friday weakness while US Treasuries seem poised to print record highs. The Shanghai Composite looks to continue the move higher while Emerging Markets move lower in broad consolidation.
The Volatility Index looks to remain at elevated levels, continuing to put pressure on equity markets. Their charts are looking weaker on the shorter timeframe with the exception of the IWM in consolidation. On the longer timeframe the SPY and QQQ still look strong as they work off overbought conditions. Use this information as you prepare for the coming week and trad’em well.
