Dear Momentum Options Subscriber,

Shares of Sony (SNE, $30.25, down $0.45) are down nearly 2% and are testing $30 despite posting better-than-expected earnings. The company had been updating Wall Street that it would beat expectations, but maybe it should have just kept quiet. The company said it will return to profitability for the first time in three years but gave conservative guidance going forward.

In any event, we may be getting another chance to go long (or short) Sony using options, as shares are setting up for a trade. We were able to bank 106% on a bullish run to $32 using call options before the company started cheerleading its earnings going into the announcement.

Speaking of trades, we have a number in play at the moment, so my commentary is a little short today.

Heading into the second half of trading, the Dow is declining 93 points to 17,941, while the S&P 500 is down a 12-pack to 2,094. The Nasdaq is sinking 49 points to 4,974, and the Russell 2000 is tanking 16 points to 1,230.

I could have additional updates into the close, so stay close to your email inboxes.

Momentum Options Play List

Closed Momentum Options Trades for 2015: 44-13-1 (76%). 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 1:20 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.

 

Freeport-McMoRan (FCX, $23.15, up $0.26)

FCX June 23 calls (FCX150619C00023000, $1.30, up $0.05)

Entry Price: $0.55 (4/27/2015)

Exit Target: $1.60 (closed first half at $1.10 on 4/28/2015)

Return: 100%

Stop Target: $1.10 (Stop Limit)

Action: The Stop Limit of $1.10 has triggered on the FCX June 23 calls, and we are now out of the trade. The calls have traded to a low of $1.04 today.

Fresh support at $22.50 was tested on today’s dip to $22.42. While it is disappointing that we were stopped out, a triple-digit profit in three days feels pretty good. If $23 holds this week, I could have us back in FCX as early as tomorrow or next week.

TiVo (TIVO, $11.17, down $0.08)

TIVO June 12 calls (TIVO150619C00012000, $0.35, down $0.05)

Entry Price: $0.30 (4/24/2015)

Exit Target: $0.90

Return: 17%

Stop Target: None

Action: Take profits and sell to close the TIVO June 12 calls at current levels.

I want to lessen our exposure on continued market weakness. We can get back into TIVO once shares test $11.40 again or clear $11.50.

 

Jabil Circuit (JBL, $22.74, down $0.41)

JBL May 24 calls (JBL150515C00024000, $0.10, down $0.05)

Entry Price: $0.60 (4/10/2015)

Exit Target: $1.20

Return: -83%

Stop Target: None

Action: Sell to close the JBL May 24 calls at current levels.

With these options expiring in two weeks, I want to save the dime in premium. If shares can reclaim $23-$23.50, we can use June or July calls to play a possible run to fresh 52-week peaks. In the meantime, we are out of the trade.

 

Limelight Networks (LLNW, $3.71, up $0.01)

LLNW September 4 calls (LLNW150918C00004000, $0.45, flat)

Entry Price: $0.35 (4/29/2015)

Exit Target: $0.70

Return: 29%

Stop Target: None

Action: Earnings are due out after the close today. I originally expected that they would be released this morning, and I apologize for any confusion.

Wall Street is expecting a loss of $0.04 a share on revenue of $39 million. I’m hoping that the company can break even or turn a profit on higher-than-expected revenue.

The company received a takeover offer north of $6 last June, and management needs to show shareholders why they deserve to run the ship.

 

Krispy Kreme Doughnuts (KKD, $17.83, down $0.28)

KKD June 17 puts (KKD150619P00017000, $0.70, up $0.10)

Entry Price: $0.35 (4/28/2015)

Exit Target: $1.05 (closed first half at $0.70 on 4/29/2015)

Return: 100%

Stop Target: $0.45 (Stop Limit)

Action: The next wave of support is at $17.50, followed by $17 if $18-$17.75 fails to hold. Resistance is at $18.50-$18.75 and the 200-day moving average.

 

iShares Russell 2000 (IWM, $122.15, down $1.65)

IWM May 127 calls (IWM150515C00127000, $0.20, down $0.15)

Entry Price: $0.70 (4/28/2015)

Exit Target: $1.40

Return: -71%

Stop Target: None

Action: I want to give the trade a little wiggle room before bailing to see if the 100-day moving average holds. This level on the Russell 2000 has held all year long and, each time it’s been tested, a rebound has occurred.

I mentioned that I also plan to be in the position through next Friday, so let’s stay patient. I’m placing the trade on “hold,” and it will appear in the “Trades on Hold” section in subsequent updates. I will be monitoring the position until we need to take action. A solid close for a few days below the 100-day moving average might be a good clue that May could be bearish. However, I won’t count the bulls out until they tap out.

 

Opko Health (OPK, $14.13, down $0.25)

OPK June 16 calls (OPK150619C00016000, $0.45, down $0.05)

Entry Price: $0.50 (4/27/2015)

Exit Target: $1.00

Return: -10%

Stop Target: None

Action: Support is at $14.50-$14.25 and the 50-day moving average. A close below $14 would be slightly bearish. The 52-week high is at $15.23, and a close above $15-$15.25 should lead to a run at $16-$17 over the near term. Earnings are due out the second week of May.

 

SunPower (SPWR, $32.63, down $0.64)

SPWR June 38 calls (SPWR150619C00038000, $0.50, down $0.12)

Entry Price: $0.95 (4/22/2015)

Exit Target: $1.90

Return: -47%

Stop Target: None

Action: Earnings are due out after the close today. Continue to hold. The 50-day moving average is holding, and these are June options.

 

Dot Hill Systems (HILL, $6.33, down $0.07)

HILL September 7.50 calls (HILL150918C00007500, $0.50, flat)

Entry Price: $0.45 (4/20/2015)

Exit Target: $1.35-$1.80

Return: 11%

Stop Target: None

Action: Near-term support is at $6.25 following the close below $6.50. Resistance is at $6.50-$6.75, and a close above the latter would be bullish for a run at $7. Earnings are due out on May 7, and I will cover the company’s numbers next week.

 

Trades on Hold — other 2015 Portfolio Open positions (1): 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.

BlackBerry (BBRY) June 13 calls (from March 2015) — This is a speculation trade from early March on BBRY receiving a takeover offer of $14 or better by mid-June — Continue to hold.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options

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