Dear Momentum Options Subscriber,

The bulls are going for their third-straight win, as today’s action has been strong on another run at resistance and push to all-time highs. While the talking heads continue to go on about the Fed, none of them have mentioned the breakout in the small-caps, as they are sitting at fresh all-time highs.

One stock I want to bring to your attention is Rave Restaurant Group (RAVE, $13.14, up $2.03), as shares are surging 22% today on an analyst upgrade. I have been researching the stock for a few years now since it was below $5. I haven’t talked about the company in this newsletter because there are no options available to trade on RAVE. However, it is a stock I picked for my publisher’s “Best Stocks for 2015” contest.

The company opened its 51st “Pie Five” location last week and expects to reach 100 stores by the end of the year. RAVE also has plans for 500 restaurants over the next five years. I have called the company the Chipotle Mexican Grill (CMG, $608.06, up $1.22) of pizza, and we know how well CMG has done over the past decade.

RAVE is relatively unknown by the suits-and-ties because it is a small-cap stock that has a market cap of $138 million. CMG has a market cap of nearly $19 billion.

While today’s gains look impressive, it is not too late to get into RAVE. I have a six to 12 month Price Target of $20 for shares, but, longer-term, this stock could easily follow the footsteps of CMG.

The company’s management team is top-notch, and I will go into more detail about the company in the coming weeks. For now, value investors could start accumulating positions at current levels.

Turning to the market, the Dow is up 178 points to 18,114, while the S&P 500 is higher by 18 points to 2,118. The Nasdaq is climbing 61 points to 5,126 and is at fresh 15-year highs. The Russell 2000 is popping a 12-pack to 1,280 and is at fresh all-time highs.

I’m coming to press a little early today, as I have a New Trade I want to get us into. Let’s go check it out.

Momentum Options Play List

Closed Momentum Options Trades for 2015: 65-20-1 (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 11:10 a.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.


New Trade

Microsoft (MSFT, $46.54, up $0.57)

Buy to open the MSFT July 47 calls (MSFT150717C00047000, $0.73, up $0.13) at current levels.

Shares have recovered their 50-day moving average following a brief backtest to $45 and the 100-day moving average.

I like these call options at current levels to play a run to $50 and fresh 52-weeks by mid-July. These are the regular monthly options that expire on July 17.


United Parcel Service (UPS, $101.27, up $0.85)

UPS July 105 calls (UPS150717C00105000, $0.45, up $0.05)

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

Exit Target: $1.05

Return: -15%

Stop Target: None


UPS October 110 calls (UPS151016C00110000, $0.65, up $0.06)

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

Exit Target: $1.40

Return: -7%

Stop Target: None

Action: Resistance at $101 and the 200-day moving average has been cleared. A move above $102 would be very bullish. Support is at $100-$99 and the 100- and 50-day moving averages.

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


Wells Fargo (WFC, $57.34, up $0.17)

WFC July 60 calls (WFC150717C00060000, $0.21, up $0.01)

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

Exit Target: $0.50

Return: 5%

Stop Target: None

Action: Resistance is at $57.50 and the recent all-time of $57.57. Shares have traded to a high of $57.48 today. Support is at $56.50-$56.


Rigel Pharmaceuticals (RIGL, $3.31, down 0.02)

RIGL September 5 calls (RIGL150918C00005000, $0.30, flat)

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

Exit Target: $0.80

Return: -25%

Stop Target: None

Action: Support is at $3.25-$3. Resistance is at $3.50.

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


Sony (SNE, $30.14, up $0.19)

SNE July 33 calls (SNE150717C00033000, $0.17, up $0.02)

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

Exit Target: $0.90

Return: -62%

Stop Target: None

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

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options