Trade of the Day: Comcast (CMCSA)

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The stock market shrugged-off some early morning weakness Tuesday to push additional layers of resistance. Although the major indices faded from their intraday highs into the closing bell, continued momentum is setting up the market for a run towards all-time highs.

The blue-chips on the Dow tested fresh support at 17,800 following the opening dip to 17,796. The rebound to 17,977 fell just shy of resistance at 18,000. A move above this level could lead toward a run at 18,351 and the all-time high.

The S&P 500 slipped below support at 2,100 after trading down to 2,097 on the open. There was wiggle room on the stock market indices to 2,090 but the bulls didn’t need it following the push to 2,116. Resistance is at 2,125 followed by the all-time high at 2,134.

The tech names on the NASDAQ traded to a low of 5,109 at the start of yesterday’s action with support at 5,100 holding. The bounce into positive territory during the second half reached a peak of 5,163 with resistance at 5,150 holding by a nickel. A move above this level gets 5,200 and the all-time high at 5,237 in play.

The small-caps on the Russell 2000 made a quick backtest to support at 1,180-1,175 on Tuesday’s open and struggled for the first half of trading. The bulls woke up during the stock market lunch break and pushed a high of 1,196 ahead of the close. Resistance is at 1,200 and a move above this level could lead to a run at 1,220-1,225.

I see the stock market moving higher, so let’s take on a new bullish trade in Comcast (CMCSA).

A golden cross is in the processing of forming on Comcast’s chart, with the 50-day moving average 6 cents away from the 200-day moving average.

Short-term resistance is at $63-$63.25. A move above the latter should get the all-time high from July of $64.99 in play. Near-term support is at $62 followed by $61-$60 and the 100-day moving average.

Comcast recently reported earnings that matched Wall Street’s expectations for $0.80 a share. However, revenues were higher at $18.67 billion versus expectations for $18.03 billion.

Comcast owns NBC Universal Pictures, which delivered impressive results from the movie department following the record-breaking box office success Jurassic World and Minions. The film part of the business generated $1.9 billion in revenue following a 64% increase compared to last year’s 3Q numbers from the division.

Its theme parks are also bustling following summer attendance that ranked as the highest in the company’s history. Overall, Comcast seems to be running smoothly across the board with shares poised for a blue-sky breakout.

Buy the CMCSA December 65 calls at current levels, which are currently around $0.75.

My exit target for the calls is $1.50, and I do not have a stop loss at this time.

The Motorola (MSI) calls I entered last week are up nicely with better than a 40% return as I write. The company’s earnings are due this morning. Multi-year resistance is at $72.50, while support is at $69 followed by $68-$67.50 and the 50-day moving average. Keep holding for additional profit, as my target remains $1.40.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/11/trade-of-the-day-comcast-cmcsa/.

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