Dear Momentum Options Subscriber,

Wall Street got its wish on Wednesday, as the Fed left interest rates unchanged. In the meeting minutes, 15 of 17 “Fed Heads” still indicated that the first rate hike should take place this year, just not right now. Although trading was choppy, the bulls prevailed for the second-straight session to keep resistance and all-time highs in play.

The Dow advanced 31 points, or 0.2%, to end at 17,935. The blue-chips traded to a low of 17,839 ahead of the Fed update while holding support at 17,800. The rebound to 17,998 came close to testing resistance at 18,000-18,100. If cleared, a move to 18,350 and all-time highs would be in play.

The S&P 500 added 4 points, or 0.2%, to settle at 2,100. The index dipped to 2,088 intraday, with support at 2,080-2,075 easily holding. The late-session push to 2,105 held resistance at 2,100 into the close and looked bullish. There are additional hurdles at 2,115-2,125, and a close above the latter should get all-time highs north of 2,135 in play.

The Nasdaq climbed 9 points, or 0.2%, to close just below 5,065. Tech opened at 5,067 and pushed resistance at 5,075 during the first half of trading. The backtest to 5,042 stretched support at 5,050, but that level held. The late-day run to 5,080 afterwards still keeps 5,100-5,150 and all-time highs in the mix. Backup support is at 5,025-5,000 on a close below 5,050.

The Russell 2000 slipped a point, or 0.1%, to finish at 1,268. The small-caps traded to a high of 1,274 shortly after the open but failed to hold resistance at 1,270-1,275. The bears pushed a low of 1,266 intraday but had a hard time challenging support at 1,260. A close above 1,270, or below 1,260 should offer good clues for how the rest of the week and next play out.

The S&P 500 Volatility Index ($VIX, 14.50, down 0.31) pushed 15.49 ahead of the Fed update before cascading back below 15 into the close. The VIX traded down to 14.07 but was unable to get below 13.50 to confirm that higher highs are in store.

Yesterday’s action keeps the possibility of a continued trading range in the mix, and the slight pullback in the small-caps was disappointing. However, I’m still hopeful that new all-time highs will come by the end of the month or into July.

From desk to press, futures look like this: Dow (+46); S&P 500 (+5); Nasdaq 100 (+12).

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 8:00 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.


United Parcel Service (UPS, $100.42, up $0.07)

UPS July 105 calls (UPS150717C00105000, $0.40, flat)

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

Exit Target: $1.05

Return: -24%

Stop Target: None


UPS October 110 calls (UPS151016C00110000, $0.59, down $0.01)

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

Exit Target: $1.40

Return: -16%

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.

UPS shares held up well despite FedEx (FDX)’s $0.02 earnings and revenue miss. Shares fell 3%, but UPS responded well after being dragged down in sympathy and holding the $100 level.

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


Rite Aid (RAD, $8.92, down $0.03)

RAD July 8 calls (RAD150717C00008000, $1.05, flat)

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

Exit Target: $1.30 (closed 1/3 @ $1.00 on 6/11/15, closed 1/3 @ $1.00 on 6/16/15)

Return: 59%

Stop Target: $0.80 (Stop Limit)


RAD October 9 calls (RAD151016C00009000, $0.85, flat)

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

Exit Target: $1.10 (closed 1/3 @ $0.80 on 6/11/15, closed 1/3 @ $0.80 on 6/16/15)

Return: 52%

Stop Target: $0.60 (Stop Limit)

Action: Earnings are due out this morning. If shares rally past resistance and push $9.50-$10, I will likely close the July calls into strength while holding the October calls open. If so, look for a Profit Alert. If shares slip to test support, our Stop Limits will likely trigger.

Resistance is at $9-$9.25. Support is at $8.75-$8.50.

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. We closed another third of both positions on June 16.


Wells Fargo (WFC, $57.17, down $0.05)

WFC July 60 calls (WFC150717C00060000, $0.20, down $0.02)

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

Exit Target: $0.50

Return: 0%

Stop Target: None

Action: Resistance is at $57.50 and the recent all-time of $57.57. Shares tested a high of $57.55 yesterday. Support is at $56.50-$56.


Rigel Pharmaceuticals (RIGL, $3.33, up $0.04)

RIGL September 5 calls (RIGL150918C00005000, $0.30, down $0.05)

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, $29.95, down $0.49)

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 $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