Dear Momentum Options Subscriber,
With futures weak going into and after this morning’s jobs report, it was a clear sign that backup support would be tested. The bulls responded well, as they have bounced off of the lows, but there is still more action to go.
Nonfarm payrolls came in at 280,000 last month, which was the largest gain since December, but the unemployment rate rose to 5.5%. The rate edged up as college graduates hit the job market, eager to put their skills to work.
As far as the Greece situation, it looks like it will get kicked into the back half of the month. No need to drag our Friday down with that news, as I will cover the boring details on Monday.
From the looks of this week’s action, a continued trading range could be on the horizon along with heightened volatility. There is also the chance of a major breakout or breakdown during June, and the good news is that we will be well positioned to play the move.
One bright spot today has been the financial stocks, which are showing strength.
The Financial Select SPDR (XLF, $24.60, down $0.22) is pushing resistance at $24.80-$25 and has traded to a high of $24.95 today. Continued closes above $25 would be very bullish for the market.
The Dow is currently declining 32 points to 17,873, while the S&P 500 is lower by a point to 2,094. The Nasdaq is advancing 2 points to 5,060, and the Russell 2000 is gaining a quarter of a point to 1,251.
Our current trades are holding up well, so let’s go check on the action. While there could be a late-day update, I think we will be fine heading into the weekend. If you don’t hear from me later on, I will be back on Monday with a full update and chart work.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 57-18-1 (75%). 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 12:05 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.
Rigel Pharmaceuticals (RIGL, $3.61, up $0.03)
RIGL September 5 calls (RIGL150918C00005000, $0.51, up $0.05)
Entry Price: $0.40 (6/4/2015)
Exit Target: $0.80
Stop Target: None
Action: Resistance is at $3.75, followed by $4 and the 50-day moving average. Support is at $3.30-$3.25 and the 100-day moving average.
You can read my detailed write-up in this morning’s Pre-Market Update.
Sony (SNE, $30.05, up $0.03)
SNE July 33 calls (SNE150717C00033000, $0.25, flat)
Entry Price: $0.45 (6/1/2015)
Exit Target: $0.90
Stop Target: None
Action: Support is at $30. Resistance is at $31.50.
Rambus (RMBS, $15.27, up $0.01)
RMBS July 15 calls (RMBS150717C00015000, $0.85, 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, $0.70, flat)
Entry Price: $0.43 (5/27/2015)
Exit Target: $0.90
Stop Target: $0.55 (Stop Limit)
Action: Resistance is at $15.50. Near-term support is at $15, and a dip below $14.75 will likely trigger the Stop Limits.
Dot Hill Systems (HILL, $7.46, down $0.03)
HILL September 7.50 calls (HILL150918C00007500, $0.80, flat)
Entry Price: $0.55 (5/21/2015)
Exit Target: $1.10
Stop Target: $0.57 (Stop Limit)
HILL December 7.50 calls (HILL151218C00007500, $1.00, flat)
Entry Price: $0.80 (5/21/2015)
Exit Target: $1.60
Stop Target: $0.85 (Stop Limit)
Action: Shares have tested $7.50 today. Resistance is at $7.50-$7.75, and a run to $8-$10 appears to be in the works. Support is at $7.25-$7.
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, $124.53, up $0.03)
IWM June 128 calls (IWM150619C00128000, $0.23, down $0.08
Entry Price: $0.70 (5/19/2015)
Exit Target: $0.90 (Limit Order)
Stop Target: None
Action: Short-term support is at $124, followed by $123 and the 50-day moving average. Resistance is at $126-$127.
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