Dear Momentum Options Subscriber,

The bulls stretched their winning streak to five-straight sessions on Tuesday, but Tech was weak and biotech stocks weighed heavily on the Nasdaq. The broader market and small-caps showed strength, and volatility stayed subdued, both of which were good signs.

The Dow added 64 points, or 0.4%, to end at 18,024. The blue-chips opened at 17,971 and easily cleared 18,000 within minutes after the opening bell. The bulls pushed an all-time intraday high of 18,069 and held round number resistance into the close. There is additional momentum to 18,200-18,350 over the near term as long as fresh support at 17,900-17,800 holds up.

The S&P 500 gained 4 points, or 0.2%, to settle at 2,082. The index held positive territory throughout the day after opening at 2,081 and reaching another all-time intraday peak of 2,086. The bulls remain on track to trip 2,100, with fluff up to 2,125. Support is at 2,075-2,050.

The Nasdaq slipped 16 points, or 0.3%, to finish at 4,765. Tech opened at 4,798 just below resistance at 4,800 before fading to a low of 4,761 during the first half of trading. The bulls failed to hold 4,775, but short-term support at 4,750 was never really challenged. There is additional risk to 4,700 on a close below this level.

The Russell 2000 advanced a point, or 0.1%, to close at 1,202. The small-caps held support throughout the session, including during the final hour fade to 1,200. There is risk to 1,190-1,185 on a close below this level. The bulls made a run to 1,207, but fell a 6-pack shy from the all-time high of 1,213.

The S&P Volatility Index ($VIX, 14.79, down 0.46) traded in the red throughout the day and closed below 15. It was a bullish sign after 10 trading days of heightened volatility. A drop below 13.50 would confirm that higher highs are on tap. There is risk to 17.50 on a close back above 15.

The market closes early today at 1 p.m. EST, but I will have a quick update about an hour ahead of the close.

I will have a regular Pre-Market Update for you on Friday morning, but there will not be a Mid-Market Update on Friday afternoon. There could be a Trade Alert if action is needed, as I will still be monitoring the market and our trades throughout the week. I’m expecting to hold all positions open into next week and January. However, if I take profits, I will be sure let you know.

From desk to press, futures are shaping up like this: Dow (+19); S&P 500 (+2); Nasdaq 100 (+5).

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, $22.81, up $0.15)

JNPR January 23 calls (JNPR150117C00023000, $0.50, up $0.05)

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

Exit Target: $0.75

Return: 39%

Stop Target: None

 

JNPR April 24 calls (JNPR150417C00024000, $0.95, up $0.05)

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

Exit Target: $1.60

Return: 17%

Stop Target: None

Action: Resistance is at $23.25 and the 200-day moving average. A close above this level would be super bullish. Yesterday’s high reached $23.10. Support is fresh at $22 and the 100-day moving average.

 

Boston Scientific (BSX, $13.06, down $0.04)

BSX February 14 calls (BSX150220C00014000, $0.40, down $0.05)

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

Exit Target: $0.90

Return: -11%

Stop Target: None

Action: Support is at $13, followed by $12.85-$12.80 and the 50- and 200-day moving averages. Resistance is at $13.25.

 

Fortinet (FTNT, $30.91, up $0.28)

FTNT March 32 calls (FTNT150320C00032000, $1.60, up $0.10)

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

Exit Target: $2.00

Return: 60%

Stop Target: $1.05, raise to $1.10 (Stop Limit)

Action: Raise the Stop Target from $1.05 to $1.10 and make it a Stop Limit.

Shares traded to another 52-week high of $31.17 on Tuesday. Support is at $29.50-$28. My near-term target is $33-$34, which where I would like to close half of the trade.

 

American Express (AXP, $93.82, up $0.20)

AXP January 95 calls (AXP150117C00095000, $1.25, up $0.05)

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

Exit Target: $1.50 (Limit Order on Half)

Return: 108%

Stop Target: $0.95, raise to $1.05 (Stop Limit)

Action: Raise the Stop Limit from $0.95 to $1.05. The calls traded to a low of $1.18 yesterday.

Shares traded past resistance at $94 to $94.22, and the calls reached a peak of $1.40. I am trying to get $1.50 on the first half of the trade and ride the other half into the New Year on the run to $100.

Resistance remains 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. However, I have raised the Stop Limit to ensure a bigger profit on a pullback.

 

Marvell Technology (MRVL, $14.33, down $0.10)

MRVL January 15 calls (MRVL150117C00015000, $0.20, down $0.02)

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

Exit Target: $0.70

Return: -43%

Stop Target: None

 

MRVL February 15 calls (MRVL150220C00015000, $0.45, down $0.05)

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

Exit Target: $1.10

Return: -18%

Stop Target: None

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

 

Pfizer (PFE, $31.45, down $0.65)

PFE February 33 calls (PFE150220C00033000, $0.35, down $0.15)

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

Exit Target: $1.15

Return: -39%

Stop Target: None

 

PFE March 33 calls (PFE150320C00033000, $0.45, down $0.20)

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

Exit Target: $1.40

Return: -34%

Stop Target: None

Action: The weakness in biotech weighed on shares of PFE yesterday.

Support is at $31-$30.50. A close below $30-$29.50 would be bearish. Continued closes above $32 should lead to a 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, $119.86, up $0.15)

IWM January 121 calls (IWM150117C00121000, $1.25, up $0.05)

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

Exit Target: $1.80

Return: 39%

Stop Target: $0.95 (Stop Limit)

Action: Resistance is at $120. The 52-week high is at $120.97. Support is at $118-$117.50.

 

PowerShares QQQ (QQQ, $103.21, down $0.37)

QQQ January 107 calls (QQQ150117C00107000, $0.45, down $0.15)

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

Exit Target: $2.00

Return: -54%

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, $13.88, down $0.08)

JDSU March 14 calls (JDSU150320C00014000, $0.95, down $0.05)

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

Exit Target: $1.40

Return: 36%

Stop Target: $0.80 (Stop Limit)

Action: 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, $11.14, up $0.01)

FLEX January 11 calls (FLEX150117C00011000, $0.40, flat)

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