4 Trade Ideas for Verizon: Bonus Idea
Verizon, $VZ, comes into the week at a 3 month high and moving towards resistance. The Bollinger Bands® are opening higher with price following. The RSI is rising in the bullish zone with the MACD crossed up and positive. There is resistance at 39.85 and 41 then 42.80 and 44 before 46 and 47.50. Support lower comes at 39.25 and 38.35 then 38. Short interest is low under 1%. The stock pays a dividend with an annual yield of 6.62% and begins trading ex-dividend on January 9th. The company is expected to report earnings next on January 24th.
The January 6 Expiry options chain shows the biggest open interest at 37 on the put side and 41 on the call side. In the January chain the 35 strike and then the 40 strike have biggest open interest on the put side. The call side is biggest at 40. The January 27 Expiry, covering the earnings report, shows biggest open interest at the 38 put and 40 call. Finally, the February chain has open interest spread from 39 to 30 on the put side and builds from 37 to 40 before tailing to 43 on the call side.
Verizon, Ticker: $VZ
Trade Idea 1: Buy the stock on a move over 39.85 with a stop at 38.35.
Trade Idea 2: Buy the stock on a move over 39.85 and add a January 27 Expiry 38/36 Put Spread (54 cents) while selling the February 42 Call (35 cents).
Trade Idea 3: Buy the January 6 Expiry/February 40 Call Calendar (74 cents) and sell the January 37 Put (24 cents).
Trade Idea 4: Buy the February 36/40/42 Call Spread Risk Reversal (14 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 with 2022 in the books, saw equity markets had their worst year since 2008 and the 7th worst in the last 96 years. Good Riddance 2022!
Elsewhere look for Gold to potentially build an uptrend while Crude Oil moves in a short term uptrend. The US Dollar Index continues in a downtrend while US Treasuries resume their downtrend. The Shanghai Composite looks to continue the short term consolidation while Emerging Markets consolidate.
The Volatility Index looks to remain in the normal range making the path easier for equity markets to the upside. The charts of the SPY and IWM look to be in limbo, moving sideways as a potential bottom. On the shorter timeframe the Santa Claus Rally is in jeopardy with 2 days trading left to maintain a slight gain. The QQQ has been the weakest since mid-December now retesting the low of the year. Use this information as you prepare for the coming week and trad’em well.
