Dear Momentum Options Subscriber,

Although I rely more on technical analysis than news when it comes to trading, the talking heads often like to attribute a rally or fall in the market to a particular headline.

I’m not sure if Donald Trump’s plan to run for President has anything to do with today’s rally, but the market was tapping session highs during his announcement earlier today.

It came as a surprise to some because, while Trump has flirted with this idea in the past, he has never been taken seriously as a candidate. Now he will be.

The more important matter this week, however, is the Fed’s update on Wednesday. There was talk this morning that a rate increase could set the market back 5%-7%, as it would be a big “surprise” that Wall Street isn’t expecting. Most are still saying that a rate hike will come in September, but I think the Fed has been warning the market enough that it could test the waters early.

If today’s action stays strong, continued strength could be in store for the rest of the week. If the rebound rally fades and the indexes close in the red, trouble could be looming.

Heading into the second half of trading, the Dow is gaining 98 points to 17,889, while the S&P 500 is higher by 9 points to 2,093. The Nasdaq is up 22 points to 5,052, and the Russell 2000 is advancing 7 points to 1,268.

I have updated our current trades below with recommendations to take additional profits in our Rite Aid (RAD) trades.

Momentum Options Play List

Closed Momentum Options Trades for 2015: 63-20-1 (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 1:15 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 portfolio.

 

Rite Aid (RAD, $8.89, up $0.13)

RAD July 8 calls (RAD150717C00008000, $1.00, up $0.05)

Entry Price: $0.65 (6/9/2015)

Exit Target: $1.30 (closed 1/3 @ $1.00 on 6/11/15)

Return: 54%

Stop Target: $0.80 (Stop Limit)

 

RAD October 9 calls (RAD151016C00009000, $0.80, up $0.05)

Entry Price: $0.55 (6/9/2015)

Exit Target: $1.10 (closed 1/3 @ $0.80 on 6/11/15)

Return: 45%

Stop Target: $0.60 (Stop Limit)

Action: Take profits and sell to close another third of both positions at current levels. This will ensure that we lock in profits ahead of the earnings announcement tomorrow morning.

Support is at $8.75, followed by $8.50 and the 50-day moving average. Resistance is $9.

You can read my detailed write-up on RAD in the June 10 Pre-Market Update. We closed a third of both positions on June 11.

 

United Parcel Service (UPS, $100.02, up $0.06)

UPS July 105 calls (UPS150717C00105000, $0.36, up $0.01)

Entry Price: $0.53 (6/11/2015)

Exit Target: $1.05

Return: -32%

Stop Target: None

 

UPS October 110 calls (UPS151016C00110000, $0.61, up $0.04)

Entry Price: $0.70 (6/11/2015)

Exit Target: $1.40

Return: -13%

Stop Target: None

Action: Support is at $100-$99 and the 100- and 50-day moving averages. Resistance is at $101 and the 200-day moving average.

You can read my extended write-up on UPS in the June 12 Pre-Market Update.

 

Wells Fargo (WFC, $57.11, up $0.13)

WFC July 60 calls (WFC150717C00060000, $0.22, up $0.10)

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

Exit Target: $0.50

Return: 10%

Stop Target: None

Action: Resistance is at $57-$57.50. Support is at $56.50-$56.

 

Rigel Pharmaceuticals (RIGL, $3.44, down $0.10)

RIGL September 5 calls (RIGL150918C00005000, $0.40, down $0.05)

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

Exit Target: $0.80

Return: 0%

Stop Target: None

Action: Shares have held their 100-day moving average throughout the year, with current support at $3.50. There is additional risk to $3.25-$3 on a close below $3.40. Resistance is at $3.75-$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, $30.37, down $31)

SNE July 33 calls (SNE150717C00033000, $0.20, down $0.10)

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

Exit Target: $0.90

Return: -56%

Stop Target: None

Action: Near-term resistance is at $30.75-$31 and the 50-day moving average. Support is at $29-$28.50 and the 100-day moving average on a fade below $30.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options