Dear Momentum Options Subscriber,

The transportation stocks continue to weigh on the market, as the sector is pushing fresh 2015 lows.

In the June 1 Pre-Market Update, I talked about the continued weakness in the Dow Jones Transportation Average ($TRAN, 8,346, up 12). The one-year chart was showing a possible test of 8,000, with risk to 7,700. Although those levels aren’t in play yet, the index traded to a low of 8,256 today before rebounding to push into positive territory.

TRAN

It is still too early to tell, but a possible a short-term “double bottom” could be forming following the late-May test to 8,300-8,250. Although I mentioned that the Dow has managed to trade to all-time highs through the divergence over the past six to eight months, a hold at current levels would be a bullish sign.

The financial stocks are holding up well and have kept the bulls in the game today. I’m a little worried that the sector could become crowded as more and more of the suits-and-ties follow the money, but the trend is still higher.

The charts for many of the stocks in the sector are showing nice uptrends. We have been trading them throughout the year with good success, and I’m keeping my fingers crossed that there will be more upside.

The Dow is currently up 15 points to 17,782, while the S&P 500 is higher by 2 points to 2,082. The Nasdaq is down a dozen points to 5,009, and the Russell 2000 is declining 3 points to 1,250.

I’m working on a possible New Trade for the portfolio, but I’m still doing chart work and the math to find the best option for us, so stay locked and loaded into the close in case I take action. In the meantime, I have updated our current trades below, so let’s go take a look.

Momentum Options Play List

Closed Momentum Options Trades for 2015: 59-19-1 (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 12:25 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.

 

Wells Fargo (WFC, $56.72, up $0.60)

WFC July 60 calls (WFC150717C00060000, $0.22, up $0.05)

Entry Price: $0.20 (6/5/2015)

Exit Target: $0.50

Return: 10%

Stop Target: None

Action: Resistance is at $56.50-$57. Support is at $56-$55.50.

 

Rigel Pharmaceuticals (RIGL, $3.50, down $0.13)

RIGL September 5 calls (RIGL150918C00005000, $0.50, down $0.05)

Entry Price: $0.40 (6/4/2015)

Exit Target: $0.80

Return: 25%

Stop Target: None

Action: Support is at $3.50, followed by $3.30-$3.25 and the 100-day moving average. Resistance is at $3.75, followed by $4 and the 50-day moving average.

You can read my detailed write-up on RIGL in the June 5 Pre-Market Update.

 

Sony (SNE, $28.97, down $0.30)

SNE July 33 calls (SNE150717C00033000, $0.15, down $0.05)

Entry Price: $0.45 (6/1/2015)

Exit Target: $0.90

Return: -67%

Stop Target: None

Action: Support is at $28 and the 100-day moving average. Resistance is at $30.

 

Dot Hill Systems (HILL, $7.39, up $0.09)

HILL September 7.50 calls (HILL150918C00007500, $0.75, flat)

Entry Price: $0.55 (5/21/2015)

Exit Target: $1.10

Return: 36%

Stop Target: $0.57 (Stop Limit)

 

HILL December 7.50 calls (HILL151218C00007500, $1.15, flat)

Entry Price: $0.80 (5/21/2015)

Exit Target: $1.60

Return: 44%

Stop Target: $0.85 (Stop Limit)

Action: Support is at $7.25-$7. Resistance is at $7.50-$7.75.

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, $124.26, down $0.56)

IWM June 128 calls (IWM150619C00128000, $0.18, down $0.08)

Entry Price: $0.70 (5/19/2015)

Exit Target: $0.90 (Limit Order)

Return: -74%

Stop Target: None

Action: Short-term support is at $124 and the 50-day moving average. Resistance is at $126-$127.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options