Dear Momentum Options Subscriber,

Today’s snapback rally is just what the bulls needed, but a fade into the close would cause continued worry on Wall Street.

The Dow is up 205 points to 17,738 while the S&P 500 is higher by 27 points to 2,053. The Nasdaq is surging 70 points to 4,754 and the Russell 2000 is advancing 16 points to 1,178.

The portfolio is in great shape to add new positions and this was the exact same way things felt in early October. This is when I started recommending a bevy of call options that did well as subscribers locked-in profits on 19 of 26 trades from then until now.

The waters are still rocky but keep this in mind when opening new trades in volatile markets. Review Tuesday’s ‘Top Six’ list, stay relaxed, and get ready to make some sweet profits come mid to late January, or before.

I mentioned this week would offer a great opportunity to start new positions, and I have a New Trade I’m adding to the portfolio.

Momentum Options Play List

Closed Momentum Options Trades for 2014: 96-59 (62%). 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 takeallof 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 positionorif 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 12:35 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.

New Trade

Marvell Technology (MRVL, $14.56, up $0.27)

Buy to open the MRVL January 15 calls (MRVL150117C00015000, $0.35, up $0.07)

Buy to open the  MRVL February 15 calls (MRVL150220C00015000, $0.55, up $0.05)

Action:  Shares are holding their 50-day moving average and have room to run to $15-$15.25.  A close above the latter could lead to a blue-sky breakout. Note: Be sure you’re buying the MRVL January 15 calls that expire on Jan. 17, 2015, as there are several expirations available at that strike.

Current Trades

Pfizer (PFE, $32.02, up $0.16)

PFE February 33 calls (PFE150220C00033000, $0.65, up $0.05)

Entry Price:  $0.57 (12/8/2014)
Exit Target:  $1.15
Return:  14%
Stop Target:  None

PFE March 33 calls (PFE150320C00033000, $0.75, up $0.05)

Entry Price:  $0.68 (12/8/2014)
Exit Target:  $1.40
Return:  10%
Stop Target:  None

Action:  Support is at $31.50.  A close above $32 should lead to a continued breakout to $33-$35.  The 52-week high is at $32.96.

You can view the chart work on PFE in the Dec. 9 Pre-Market Update. You can also read about PFE’s fundamentals in the Dec. 9 Mid-Market Update.

iShares Russell 2000 (IWM, $117.35, up $1.69)

IWM January 121 calls (IWM150117C00121000, $0.90, up $0.25)

Entry Price:  $0.90 (12/5/2014)
Exit Target:  $1.80
Return:  0%
Stop Target:  None

Action:  Resistance is at $117.50-$118.  Support is at $115 with risk to $114-$113.50.

PowerShares QQQ (QQQ, $104.84, up $1.53)

QQQ January 107 calls (2015) (QQQ150117C00107000, $0.85, up $0.30)

Entry Price:  $0.98 (12/5/2014)
Exit Target:  $2.00
Return:  -13%
Stop Target:  None

Action:  Short-term resistance is at $105.  There is risk to $103-$102.50.

I have talked about the QQQs making a run to $110 on continued closes above $105 and the recent 52-week high is north of $106.

JDS Uniphase (JDSU, $14, up $0.37)

JDSU January 13 calls (JDSU150117C00013000, $1.30, up $0.30)

Entry Price:  $0.65 (12/3/2014)
Exit Target:  $1.30
Return:  100%
Stop Target:  80 cents (Stop Limit)

JDSU March 14 calls (JDSU150320C00014000, $1.10, up $0.15)

Entry Price:  $0.70 (12/3/2014)
Exit Target:  $1.40
Return:  57%
Stop Target:  80 cents (Stop Limit)

Action:  Resistance is at $13.75-$14.

You can read my full update on JDSU in the Dec. 3 Alert.

Flextronics (FLEX, $11.01, up $0.11)

FLEX January 11 calls (FLEX150117C00011000, $0.35, flat)

Entry Price:  $0.68 (9/5/2014)
Exit Target:  $1.25
Return:  -48%
Stop Target:  None

Action:  Resistance is at $11.25.  Support is at $10.75 and a close below this level might force me out of the trade.

Trades on Hold – other 2014 Portfolio Open positions (2): 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.

Fortinet December 29 calls (from September 2014) – Continue to hold.  Read my December 11th Pre-Market comments here.

International Business Machines January 170 calls (from November) – Continue to hold.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options