Originaly presented by Richard Cox.
In the week ahead, we will have some more macro data to watch, after the light calendar seen last week. In the US, we will have New Home Sales on Monday, Durable Goods orders on Wednesday, and GDP on Friday. In the Eurozone, we will have the German IFO on Wednesday. In Japan, the BoJ rate decision (watch for the accompanying statement) comes on just before the UK GDP numbers on Friday.
is starting to show a Head and Shoulders pattern on the medium term charts, with neckline support now coming in the 1.3020 area. A downside break here will be a very bearish event but it pays to be careful given the proximity to psychological support at 1.30. Because of this, I will wait for an hourly close below 1.30 and then a retracement back into 1.3015 as an area to enter into weekly PUT options
. An upside break of 1.3120 invalidates the trade and will put the focus back on the yearly highs at 1.32.
For stocks, I will look to play the rally in Honeywell International (HON)
. The stock is trading near its 52-week high, is showing slowing momentum in quarterly growth, and is trading at a price to book valuation of 4.5, which is above average when compared to its sector competitors. From a chart perspective, resistance comes in at the $75 region, so I will be looking to enter into weekly PUTS in HON at the market open, looking for a retracement back to $71.
There is a large price gap below 73, so if we see a downside break here the trade should be positioned well.