Dear Momentum Options Subscriber,
The bulls got off to a good start this morning as the major indexes enjoyed a nice opening pop to test resistance. The action turned sluggish heading into the second half of trading, although the market has since rebounded.
Lost in the shuffle, but not forgotten, are several companies that will be reporting earnings this week.
After today’s close, Lifeway Foods (LWAY) and PVH (PVH) will announce their quarterly results.
On Tuesday, Ambarella (AMBA), Cracker Barrel Old Country (CBRL), Dollar General (DG) and Guess (GES) will confess to Wall Street.
On Wednesday, Five Below (FIVE), Vera Bradley (VRA) and Verint Systems (VRNT) step up to the plate.
Cyberonics (CYBX), Diamond Foods (DMND), J.M Smucker (SJM), Joy Global (JOY), Land’s End (LE), Sears Holdings (SHLD), VeriFone Holdings (PAY), Zoe’s Kitchen (ZOES) and Zumiez (ZUMZ) highlight a busy Thursday.
Friday will wrap up with Coffee Holding (JVA) and Multi-Color (LABL) reporting their quarterly numbers.
Heading into the second half of trading, the Dow is up 51 points to 18,061, while the S&P 500 is higher by 5 points to 2,113. The Nasdaq is gaining 16 points to 5,086, and the Russell 2000 is advancing 2 points to 1,249.
I have a New Trade for the portfolio this afternoon, so let’s go check the action.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 55-18-1 (74%). 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 12:25 p.m. EST.
I hereby disclose that I will be participating in the following trade(s). 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.
Sony (SNE, $30.82, down $0.10)
Buy to open the SNE July 33 calls (SNE150717C00033000, $0.45, down $0.05) at current levels.
Shares are in the process of back-testing support at $30.50-$30 and the 50-day moving average. This level has held for much of 2015, but there is risk to $29-$28. A move above $31.50-$32 would be a bullish sign that the recent selling pressure is over.
These are the regular monthly options that expire on July 17.
Rambus (RMBS, $15.39, up $0.10)
RMBS July 15 calls (RMBS150717C00015000, $0.95, flat)
Entry Price: $0.50 (5/27/2015)
Exit Target: $1.30 (Limit Order on half)
Stop Target: $0.65 (Stop Limit)
RMBS August 16 calls (RMBS150821C00016000, $0.75, flat)
Entry Price: $0.43 (5/27/2015)
Exit Target: $0.90
Stop Target: $0.55 (Stop Limit)
Action: A close above $15.75-$16 could lead to a run at $17-$18. Near-term support is at $15, followed by $14.50.
Dot Hill Systems (HILL, $7.09, up $0.05)
HILL September 7.50 calls (HILL150918C00007500, $0.65, flat)
Entry Price: $0.55 (5/21/2015)
Exit Target: $1.10
Stop Target: $0.57 (Stop Limit)
HILL December 7.50 calls (HILL151218C00007500, $0.95, flat)
Entry Price: $0.80 (5/21/2015)
Exit Target: $1.60
Stop Target: $0.85 (Stop Limit)
Action: Support is at $7, with $6.75 serving as backup. A close below $6.75 will likely trigger the Stop Limits. Resistance is at $7.20-$7.25.
You can read my full update on HILL and check out its 15-year chart in the May 22 Pre-Market Update.
iShares Russell 2000 (IWM, $124.63, up $0.74)
IWM June 128 calls (IWM150619C00128000, $0.26, up $0.04)
Entry Price: $0.70 (5/19/2015)
Exit Target: $1.05 (Limit Order on first half), $1.40 (Limit Order on second half)
Stop Target: None
Action: Short-term support is at $123 and the 50-day moving average, followed by $122 and the 100-day moving average. Resistance is at $125-$125.50.
Limelight Networks (LLNW, $4.26, down $0.11)
LLNW September 4 calls (LLNW150918C00004000, $0.65, down $0.05)
Entry Price: $0.35 (4/29/2015)
Exit Target: $1.00 (Limit Order on half)
Stop Target: $0.45 (Stop Limit)
Action: A move above resistance at $4.50 could lead to a run to $4.75-$5. If shares reach $5, these options will be $1.00 “in the money.” Support has moved up to $4.25, with $4 serving backup.
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. These options will carry some premium through the first week of June. I would like to be out of this trade by next Friday’s close. This gives the trade until June 10 for Blackberry to get a takeover offer — Continue to hold.
Editor and Chief Options Strategist