Dear Momentum Options Subscriber,

The market has traded in a tight range throughout today’s session, with both the bulls and the bears getting in on the action. Economic news has been light and, with the bond market closed, trading has been choppy but quiet.

The bulls have triggered fresh all-time highs, and the consolidation to near-term support is bullish going forward. The small-caps hold the key for the next breakout (or breakdown), but they are making higher highs and lower lows to start the week.

Heading into the second half of trading, the Dow is down 14 points to 17,599, while the S&P 500 is lower by 2 points to 2,036. The Nasdaq is declining 6 points to 4,644, while the Russell 2000 is declining a point to 1,178.

A slight rally into the close would be nice, but, as long as fresh support holds, higher highs are still in store.

Despite the lackluster action, the current trades continue to perform well, so let’s go check the tape. I could have a New Trade or possibly a Profit Alert ahead of the close, so stay close to your email inboxes. You can also sign up to receive text alerts delivered to your mobile device to stay on top of any actions to take during the trading day. Register for text alerts here.

If you don’t hear from me, hang tight. And, before I go, thank you to all the veterans for our freedom. You make this country as great as it is and, without you, we would all be lost. Keep up the great work and heroism.

Momentum Options Play List

Closed Momentum Options Trades for 2014: 84-54 (61%). All trades are dated and time stamped so new subscribers can look at the past history to see how the trades have played out.

Do not risk more than 5% of your trading account on any one trade but do try to take all of the trades. Please remember, all “Exit Targets” and “Stop Targets” are targets. You should not have any “Hard Stops” entered to close any trades or “Exit Orders” in your brokerage account unless I list one. I will send out a “Profit Alert” or “New Trade” if I want you to close a position or if a new trade comes out. Otherwise, follow instructions at all times in the 9 a.m. and 12 p.m. – 1 p.m. updates. Also, I will usually give you a heads-up if I think I’m going to send an email outside of these time frames.

All prices given in this update are current as of 1:25 p.m. EST.

Every new Momentum Options recommendation is listed with the price at which I entered my own position. If the price is slightly different than my recommended entry or exit price when you receive the alert, don’t let that keep you from getting into or out of a trade. Occasionally, you might even get a better “fill” price than what is posted in the Open Trades and Closed Trades.


International Business Machines (IBM, $163.04, down $0.45)

IBM January 170 calls (IBM150117C00170000, $1.45, down $0.25)

Entry Price: $1.75 (11/10/2014)

Exit Target: $3.50

Return: -19%

Stop Target: $0.90

Action: I would like to see $163 hold into the close.

You can read more about why I like this trade in this morning’s Pre-Market Update.


Starbucks (SBUX, $77.75, up $0.10)

SBUX December 80 calls (SBUX141220C00080000, $0.75, flat)

Entry Price: $0.70 (11/6/2014)

Exit Target: $1.40

Return: 7%

Stop Target: None


SBUX December 77.50 calls (SBUX141220C00077500, $1.80, flat)

Entry Price: $1.05 (11/3/2014)

Exit Target: $2.10 (closed half at $1.80 on 11/7/2014)

Return: 71%

Stop Target: $1.50 (Stop Limit)

Action: A close above $78 should get $80 in play. The 52-week peak is north of $82.

You can read my previous comments on SBUX in the Nov. 5 Pre-Market Update.


JPMorgan Chase (JPM, $61.72, down $0.21)

JPM December 62.50 calls (JPM141220C00062500, $0.85, down $0.05)

Entry Price: $0.65 (11/5/2014)

Exit Target: $1.30

Return: 32%

Stop Target: $0.70 (Stop Limit)

Action: I have talked about a continued run to $63-$65 on momentum. Fresh support will try to hold at $61.50 on a pullback. I will likely close the position on a drop below $61.


PowerShares QQQ (QQQ, $101.89, down $0.07)

QQQ December 5th expiration 103 calls (QQQ141205C00103000, $0.75, flat)

Entry Price: $0.85 (11/4/2014)

Exit Target: $1.70

Return: -12%

Stop Target: None

Action: Resistance is at $102. Short-term support is at $100.


Flextronics (FLEX, $10.88, up $0.14)

FLEX January 11 calls (FLEX150117C00011000, $0.40, down $0.05)

Entry Price: $0.68 (9/5/2014)

Exit Target: $1.25

Return: -38%

Stop Target: None

Action: Resistance is at $11, with support at $10.75. Additional support is at $10.50 followed by the 50-day moving average.


Fortinet (FTNT, $27.10, down $0.02)

FTNT December 29 calls (FTNT141220C00029000, $0.45, flat)

Entry Price: $0.95 (9/2/2014)

Exit Target: $1.00+

Return: -53%

Stop Target: None

Action: Shares traded to a high of $27.25 while holding positive territory into yesterday’s close. I have talked about a run to $30 once fresh highs were set. Support is at $26.50-$26 on a pullback.


Staples (SPLS, $13.06, down $0.10)

SPLS December 14 calls (SPLS141220C00014000, $0.30, flat)

Entry Price: $0.45 (9/18/2014)

Exit Target: $0.50

Return: -33%

Stop Target: None

Action: Resistance is at $13.25. A breakout to $14-$15 could occur on continued strength. Support is at $12.80-$12.60.


Trades on Hold — other 2014 Portfolio Open positions (3): These are trades that are still open in the portfolio but are down over 50%. They have longer expiration dates and are on “hold” but are not worth mentioning until they turn around. This means I would not open any new positions. I’m still keeping track of the trades and will record the results accordingly when the trade closes or if the options expire. Click on the Open Trades and Closed Trades pages to see all open and closed positions.

AKS Steel Holding January 13 calls (from August 2014) — Continue to hold.

Rubicon December 8 calls (From August 2014) — Continue to hold.

Twitter January 67.50 calls (from October 2014) — Continue to hold.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options