Dear Momentum Options Subscriber,

Futures were showing another strong open this morning following news that Greece had offered a new debt proposal to its creditors. Although the details are sketchy, most of those involved seem to believe that a final agreement could come this week.

The new reforms gave the market a lift on the open, but trading is mixed heading into the afternoon session.

The Dow is currently up 10 points to 18,130, while the S&P 500 is lower by a point to 2,121. The Nasdaq is off 6 points to 5,147, and the Russell 2000 is declining a point to 1,291.

I’m coming to press a little early today, as I have a New Trade I want us to get into. It is another put option trade on a name I “shorted” earlier this year for a decent double-digit gain. I’m looking to make us a triple-digit profit this time around if shares continue their backtest to $20.

Momentum Options Play List

Closed Momentum Options Trades for 2015: 65-20-1 (76%). 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 11:45 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

US Steel (X, $22.61, down $0.01)

Buy to open the X July 21 puts (X150717P00021000, $0.28, up $0.01) at current levels.

Shares appear to be headed to $20 following the breakdown below $23.50, which is now acting as short-term resistance. Open interest is above 4,000 on these contracts, and the spread on these options is just $0.03. I like these puts at the current “ask” price, but traders can feel comfortable purchasing these puts up to $0.35.

These are the regular monthly options that expire on July 17. I will provide the parameters of the trade in tomorrow’s Pre-Market Update.

 

S&P 500 SPDR ETF (SPY, $211.79, down $0.10)

SPY July 200 weekly puts (SPY150710P00200000, $0.22, down $0.02)

Entry Price: $0.45 (6/19/2015)

Exit Target: $0.90-$1.20 (Limit Order at $0.90 on first half)

Return: -51%

Stop Target: None

Action: Resistance at $213. A close below $210 and the 50-day moving average would be bearish. Additional help is at $208 and the 100-day moving average.

You can read my full update on SPY and view the chart work in the June 22 Pre-Market Update.

 

Rambus (RMBS, $14.81, down $0.20)

RMBS August 16 calls (RMBS150821C00016000, $0.41, down $0.09)

Entry Price: $0.55 (6/19/2015)

Exit Target: $1.40

Return: -25%

Stop Target: None

Action: Support is at $14.50 and the 50-day moving average on a drop below $14.75. Resistance is at $15.25-$15.50, and a close above the latter would be bullish.

You can read my full update on RMBS and view the chart work in the June 22 Pre-Market Update.

 

Microsoft (MSFT, $45.76, down $0.47)

MSFT July 47 calls (MSFT150717C00047000, $0.35, down $0.15)

Entry Price: $0.73 (6/18/2015)

Exit Target: $1.50

Return: -52%

Stop Target: None

Action: Support is at $45.50-$45 and the 50-day moving average. Resistance is at $47-$48.

 

United Parcel Service (UPS, $100.78, down $0.61)

UPS July 105 calls (UPS150717C00105000, $0.30, down $0.05)

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

Exit Target: $1.05

Return: -43%

Stop Target: None

 

UPS October 110 calls (UPS151016C00110000, $0.53, down $0.01)

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

Exit Target: $1.40

Return: -24%

Stop Target: None

Action: Support is at $101 and the 200-day moving average, followed by $99 and the 100- and 50-day moving averages. Resistance is at $102.

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

 

Wells Fargo (WFC, $58.02, up $0.11)

WFC July 60 calls (WFC150717C00060000, $0.21, up $0.05)

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

Exit Target: $0.50

Return: 5%

Stop Target: None

Action: Resistance is at $58. Support is at $56.50-$56 on a close below $57.

 

Trades on Hold — other 2015 Portfolio Open positions (2): 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.

Sony (SNE) July 33 calls (from 6/1/2015) — Shares reclaimed $30 on Monday — Continue to hold.

Rigel Pharmaceuticals (RIGL) September 5 calls (from 6/4/2015) — Shares zoomed 12% on Monday to close at $3.45. This type of movement usually indicates that news is forthcoming — Continue to hold.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options