#$brew

[frankzorrilla]

The Set-Ups Are There

Not much commentary today besides the fact that I feel like the set-up are there, they just need to trigger and follow through which they have been doing somewhat. I have an interest in these stocks if and only if the go through yesterday highs plus .10 cents.

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at [email protected] or 646-480-7463.

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[mitchzacks]

Ice Cold!

A “Megabrewery” appears to be in the works with the world’s largest brewer (AB InBev) targeting a takeover of rival and second-largest brewer SABMiller. If they become one, then their sales of tasty brews like Budweiser, Corona, Stella Artois (InBev) and Miller Lite, Pilsner Urquell, and Peroni (SAB Miller) would be responsible for generating around half of the industry’s profit. 

AB InBev has yet to make a formal offer for SABMiller, but rumors are about that it will. Under British law, it must do so by October 14th.

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[dragonflycap]

Brewing up a trade in Craft Brewers Alliance

Craft Beers are hot.  Everybody wants to get in on the action.  Who wants a Lite Beer when you can have a Grapefruit Sculpin IPA from Ballast Point Brewing Company?  Not me.  The only time I will touch a Budweiser or Bud Light is at a baseball game when I am too lazy to leave my seat to get a beer.

What might be a bit peculiar then is that the stock price of one of the few that are public, Craft Brewers Alliance ($BREW) has been struggling for quite some time.  The chart below shows the last 12 months price action.  In it you can see the peak in October 2014 followed by a sell off, more consolidation then another sell off of equal depth.  This was met by a slow rise back to the consolidation zone before another quick sell off, also the same depth.

Since May it has been consolidating.  And that has occurred between the 10.85 level that was support in January and July through August on 2014, and the 10.10 area that was support in June 2014.On the surface this looks it is on the precipice of a major breakdown, even after falling over 40% from the peak.  Another move of $3.50 out of this consolidation would take it down to about $7.  In fact, the weekly chart gives another reason for this with a bullish Bat harmonic that has a Potential Reversal Zone (PRZ) at 7.12 below.

With the Bollinger Bands® starting to tighten it could be time for a move.  But the momentum indicators suggest it may have bottomed.  The RSI is moving back higher and the MACD has crossed up, as they did before the last retracement of the move to 10.85.  So will it move back up to 13 and fill the gap, or break the consolidation to the downside and travel to 7?

The short answer is, nobody knows.  But a break of that consolidation area will give a major clue.  And with those tightening Bollinger Bands it is time to pay attention.  Now you know what it means when a technician tells you they do not care which way a stock or index moves.  If you are prepared, any movement presents an opportunity.

More at Dragonfly Capital

[dragonflycap]

5 Trade Ideas for Monday: Blackrock, Craft Brewers Alliance, Eli Lilly, Interactive Brokers & Newfield Exploration

5 Trade ideas excerpted from the detailed analysis and plan for premium subscribers.

BlackRock, Ticker: $BLK

BlackRock, $BLK, has been consolidating over support in a wide range since November. Recently there has been downside pressure that resulted in the price ending Friday at support and the 100 day SMA. The falling RSI and MACD would support a push lower.

Craft Brew Alliance, Ticker: $BREW

Craft Brew Alliance, $BREW, moved lower throughout last fall in a two step fashion. Both steps were $3 moves. But since mid-January it has rebounded and is now consolidating. What two weeks ago looked like a Death Cross (50 day SMA crossing down through the 200 day SMA) is now turning into more of a glancing blow. The RSI is struggling to get over the mid line for now and the MACD may be leveling. Watch this for a break either way.

Interactive Brokers, Ticker: $IBKR

Interactive Brokers, $IBKR, has been trending higher since September if you knock out the couple of days when FXCM scared the world about currency trading. Now it is consolidating at the highs. The RSI is in the bullish zone and the MACD is rising as it moves sideways back into the Bollinger Bands®.

Eli Lilly, Ticker: $LLY

Eli Lilly, $LLY, has been trending higher since moving out of consolidation in June. The last 2 months has been another consolidation range. And after connecting with the 50 day SMA it is now pressing against resistance. The RSI has held in the bullish zone while the MACD is rising, both supporting upward price movement.

Newfield Exploration, Ticker: $NFX

Newfield Exploration, $NFX, fell from peak at 45 quickly to 25. After a quick bounce to the 200 day SMA it fell back and made a 'W'. There was a quick consolidation last week before it started higher again Friday. The RSI is into the bullish zone now and making new higher highs as the MACD rising, supporting more upward price action.

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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 February sees the equity markets biased to start the month to the downside.

Elsewhere look for Gold to continue to consolidate in the short term uptrend while Crude Oil may be ready for a bounce or reversal in the downtrend. The US Dollar Index seems ready to consolidate sideways in the uptrend while US Treasuries continue to be biased higher. The Shanghai Composite is also consolidating in its uptrend while Emerging Markets look to have failed in their attempt to rally and are biased to the downside.

Volatility looks to remain low but drifting up easing the wind behind the equity markets to a light breeze. The equity index ETF's SPY, IWM and QQQ, all see risk to the downside in both the daily and weekly charts with the QQQ the strongest on the longer timeframe followed by the IWM and then the SPY, but the IWM possibly a bit stronger on the short timeframe over both the QQQ and SPY. Use this information as you prepare for the coming week and trad'em well.

More at Dragonfly Capital and get my book, Trading Options: Using Technical Analysis to Design Winning Options Trades.

[dragonflycap]

Forget the Cup and Handle, Buy a Pint and Handle of Brew

It's late in the week, and we have already gotten through the Federal Reserve Open Market Statement, with Alibaba and Scotland votes on tap. Time for a beer. Specifically a Craft Brewers Alliance, $BREW. Not to drink, you still need a clear head for the rest of the week and Option Expiration, but to add to your portfolio.

The chart above tells why. After a long downtrend this year capped by the falling red resistance line, the stock price is now breaking to the upside. Additionally there is a Cup and Handle pattern triggering as the price moves over the most recent prior high level at 13.57. This gives a target to the upside at 17.07, near the start of that red line. That sounds good as it is. But with a little imagination you can see that a move over 15 the late April high would make for another big Cup and Handle, maybe a Pint and Handle that would target 20. Cheers!

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