Stock, Option and Futures Trading
The Best Set Up I See – IYR April 63 Calls
After scanning the markets for hours and hours this weekend the best set up I see is April IYR 63 calls. The stocks like AMZN, AAPL and BIDU are not setting up like IYR meaning; the other stocks seem too high risk at this point and even though we are still in the uptrend those stocks seem very emotional at the current price.
IYR looks like it could move to $65 then $67 which is not a home run but a solid trade and the option are cheap with the April 63’s closing at .49 cents on Friday.
If IYR takes out the high of Friday that would be the trigger we would need to get long with a stop at $59.95 on the stock meaning; if IYR takes out the $59.95 exit the calls and move on.
We are still in the timing window that could be resistance but the NQ has already taken out the timing window so which symbol is correct? No one ever knows for sure so the best thing is to just stick to the overall trend direction which is clearly still up.
A confirmation of strength would be seeing the NQ above the 2774 but IYR is in its own pattern and is worth a shot as the chart looks right now. If IYR gaps up it is still worth entering as long as it does not gap above $63.20 meaning; it is still a good trade but the option would be more and the risk to reward would be off.
Target2 $67 -$69
Stop – $59.95
PS. Mondays are the hardest to predict the night before. The NQ stocks look a little more like a top as far as candle formations on the Daily charts but like we have been saying it is the Weekly and Monthly that are “In Play” so the Daily reversal candles could just be reasons some traders will go short to then get squeezed. Right here is a tricky spot on the chart so we would label the IYR trade aggressive which means it is best to trade less size.