Dear Momentum Options Subscriber,

The bulls ended a three-session Monday slide, as the blue-chips pushed all-time high territory again. The S&P recorded its 50th all-time closing high of the year, but the bigger story was the small-caps.

The Dow jumped 154 points, or 0.9%, to finish at 17,959. The blue-chips traded in positive territory throughout the session and reached a high of 17,962. The close above 17,900 was bullish and keeps 18,000 in play. The all-time high is at 17,991. There is additional momentum to 18,200-18,350 if 18,000 is cleared. Short-term support is at 17,800-17,600.

The S&P 500 gained 8 points, or 0.4%, to close at 2,078. The index opened a point lower to 2,069 but held this level during the first half of trading. The bulls pushed a high of 2,078 and held the 2,075 level into the closing bell. The all-time intraday record high is at 2,079, and a close above this level will likely lead to a run to 2,100. Support is at 2,050-2,025.

The Nasdaq added 16 points, or 0.3%, to settle at 4,781. Tech touched a low of 4,757 at the start of trading before reaching finishing half of a point off of its peak. The bulls held 4,775 and remain on track to test 4,800-4,810 and fresh 52-week highs. Near-term support is at 4,750-4,700.

The Russell 2000 advanced nearly 6 points, or 0.5%, to end at 1,201. The small-caps opened a point higher before testing a low of 1,193 in the early afternoon. The 2-point dip was a weak effort by the bears to get below 1,190-1,185 and fresh support. There is additional help at 1,975, but the close above 1,200 was bullish. The all-time high is at 1,213, with fluff up to 1,225.

The S&P Volatility Index ($VIX, 15.25,down 1.24) kissed 16.68 within the first 30 minutes of trading before fading to a low of 15.03. The bulls came close to getting the VIX back below 15 in the final 30 minutes of trading. A close below this level would confirm that Santa Claus is coming to Wall Street. There is still risk to 17.50, which, if cleared, will be the first that signal volatility is back.

From desk to press, futures are shaping up like this: Dow (+33); S&P 500 (+3); Nasdaq 100 (+8).

Momentum Options Play List

Closed Momentum Options Trades for 2014: 97-61 (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 8:30 a.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.


Juniper Networks (JNPR, $22.66, up $0.18)

JNPR January 23 calls (JNPR150117C00023000, $0.45, up $0.03)

Entry Price: $0.36 (12/19/2014)

Exit Target: $0.75

Return: 25%

Stop Target: None


JNPR April 24 calls (JNPR150417C00024000, $0.90, up $0.03)

Entry Price: $0.81 (12/19/2014)

Exit Target: $1.60

Return: 11%

Stop Target: None

Action: The close above $22.50 gets $23.25 and the 200-day moving average in play. Support is fresh at $22 and the 100-day moving average.


Boston Scientific (BSX, $13.10, down $0.05)

BSX February 14 calls (BSX150220C00014000, $0.45, down $0.02)

Entry Price: $0.45 (12/19/2014)

Exit Target: $0.90

Return: 0%

Stop Target: None

Action: Shares could make a run to $13.75 over the near-term. A close above this level should lead to a run past $14 and fresh 52-week peaks.

Support is at $13, followed by $12.85-$12.80 and the 50- and 200-day moving averages.

The February call options expire in two months. This gives the trade plenty of time for a run past $15.


Fortinet (FTNT, $30.63, up $0.53)

FTNT March 32 calls (FTNT150320C00032000, $1.50, up $0.20)

Entry Price: $1.00 (12/18/2014)

Exit Target: $2.00

Return: 50%

Stop Target: $1.05

Action: I have set a Stop Target at $1.05 to protect profits, but it is not a Stop Limit. I could make it a Stop Limit on continued highs, but I don’t want the market makers to take advantage of us on any wild price swings.

Shares traded to another 52-week high of $30.90 on Monday. Support is at $29.50-$28.


American Express (AXP, $93.62, up $0.72)

AXP January 95 calls (AXP150117C00095000, $1.20, up $0.10)

Entry Price: $0.60 (12/15/2014)

Exit Target: $1.50 (Limit Order on Half)

Return: 100%

Stop Target: $0.90, raise to $0.95 (Stop Limit)

Action: Raise the Stop Limit from $0.90 to $0.95. Yesterday’s low reached $0.97.

Monday’s high on AXP stock reached $93.66. The limit order to close half of the trade at $1.50 should trigger on a pop past resistance at $94-$95. Near-term support is at $92, followed by $90.

A “golden cross” is forming, with the 50-day moving average in route to clear the 200-day moving average. This is a bullish sign, which is why I feel shares could challenge $100 during the first quarter of 2015. A close below $88 would be bearish.


Marvell Technology (MRVL, $14.42, up $0.24)

MRVL January 15 calls (MRVL150117C00015000, $0.22, up $0.02)

Entry Price: $0.35 (12/11/2014)

Exit Target: $0.70

Return: -37%

Stop Target: None


MRVL February 15 calls (MRVL150220C00015000, $0.50, up $0.05)

Entry Price: $0.55 (12/11/2014)

Exit Target: $1.10

Return: -9%

Stop Target: None

Action: The next wave of resistance is at $14.50-$14.75, and a close above the latter would be super bullish. Support is at $14-$13.75.


Pfizer (PFE, $32.09, up $0.15)

PFE February 33 calls (PFE150220C00033000, $0.50, up $0.05)

Entry Price: $0.57 (12/8/2014)

Exit Target: $1.15

Return: -12%

Stop Target: None


PFE March 33 calls (PFE150320C00033000, $0.65, up $0.05)

Entry Price: $0.68 (12/8/2014)

Exit Target: $1.40

Return: -4%

Stop Target: None

Action: Continued closes above $32 should lead to a breakout to $33-$35. The 52-week high is at $32.96. Support is at $31-$30.50. A close below $30-$29.50 would be bearish.

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, $119.71, up $0.81)

IWM January 121 calls (IWM150117C00121000, $1.20, up $0.10)

Entry Price: $0.90 (12/5/2014)

Exit Target: $1.80

Return: 33%

Stop Target: $0.95 (Stop Limit)

Action: Set a Stop Limit at $0.95 to protect profits. I will move it up once the small-cap ETF clears $120. The 52-week high is at $120.97. Support is at $118-$117.50.


PowerShares QQQ (QQQ, $104.58, up $0.26)

QQQ January 107 calls (QQQ150117C00107000, $0.60, up $0.05)

Entry Price: $0.98 (12/5/2014)

Exit Target: $2.00

Return: -39%

Stop Target: None

Action: Resistance is at $105, and continued higher closes above this level would be bullish. Support is at $103.50-$102.


JDS Uniphase (JDSU, $13.96, up $0.03)

JDSU March 14 calls (JDSU150320C00014000, $1.00, down $0.05)

Entry Price: $0.70 (12/3/2014)

Exit Target: $1.40

Return: 43%

Stop Target: $0.80 (Stop Limit)

Action: Shares pushed a high of $14.02 on Monday. The 52-week peak is at $14.99. Near-term support is at $13.75, and a drop below this level could lead to $13.50-$13.25.

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


Flextronics (FLEX, $11.13, up $0.12)

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

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

Exit Target: $1.25

Return: -40%

Stop Target: None

Action: Shares are on track to challenge $11.25-$11.50 as long as $11 holds. Support is at $10.75-$10.50. A close below $10.50 and the 100-day moving average could force me out of this trade from September.


Holiday Savings Event: The local stores have their holiday decorations up and I’m beginning to think about gifts, so today I wanted to invite you to join me for a special Holiday Savings Event that I’m throwing for a limited time only. Renew your Momentum Options service today and save $200. It doesn’t matter when your subscription expires because I’ll just extend your current membership. Click here now to take advantage of this savings opportunity!

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options