Dear Momentum Options Subscriber,

The market pulled back for a second-straight session on Thursday, as traders remained worried about the latest rumors of a Greece deal that has been in flux constantly. The clock is ticking on the country’s fate concerning its debt issues, and the outcome will likely be decided between now and early next week.

The Dow declined 75 points, or 0.4%, to close at 17,890. The blue-chips made an opening run past resistance at 18,000 to 18,036, but the 70-point gain quickly faded. The second half of trading was controlled by the bears, as they tested support at 17,900-17,800 and pushed session lows into the closing bell.

The S&P 500 slipped 6 points, or 0.3%, to finish at 2,102. The index tested short-term resistance at 2,115-2,125 after kissing 2,116 intraday. The pullback to 2,101 held support at 2,100-2,090.

The Nasdaq fell 10 points, or 0.2%, to end at 5,112. Tech tested resistance at 5,150 during the first half of trading following a run to 5,141. The low of 5,102 held near-term support at 5,100-5,075.

The Russell 2000 dipped by half of a point, or 0.05%, to settle at 1,283. The small-caps traded to a high of 1,287 but failed at challenging resistance at 1,290-1,300. The second-half drop to 1,278 held support at 1,275.

The S&P 500 Volatility Index ($VIX, 14.01, up 0.75) traded down to 12.92, but the bulls didn’t have the energy to get below 12.50. The bears cleared 13.50 on the close after pushing a high of 14.16. A close above 14.50-15 would be a slightly bearish signal for next week.

I am bringing back coverage on Rigel Pharmaceuticals (RIGL) and Sony (SNE) today, as both stocks have made strong moves this week.

From desk to press, futures look like this: Dow (+25); S&P 500 (+2.5); Nasdaq 100 (-5).

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 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.


US Steel (X, $22.04, down $0.37)

X July 21 puts (X150717P00021000, $0.45, up $0.10)

Entry Price: $0.28 (6/23/2015)

Exit Target: $0.60 (closed first half at $0.45 on 6/25/15)

Return: 61%

Stop Target: $0.25 (Stop Limit)

Action: We took partial profits on this trade on yesterday’s drop below $22. Shares traded to a low of $21.91 yesterday, and I still expect a possible test to $21-$20. Short-term resistance is at $22-$22.50. A close above the latter will likely trigger our Stop Limit on the second half of the position.

Side Note: Schnitzer Steel Industries (SCHN) is scheduled to report earnings on Tuesday, June 30, which could have a slight impact on shares of X next week. SCHN has a 52-week low of $15 that I would love to see tested.

You can read my full report on X in the June 24 Pre-Market Update.


S&P 500 SPDR ETF (SPY, $209.83, down $0.67)

SPY July 200 weekly puts  (SPY150710P00200000, $0.35, up $0.07)

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

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

Return: -22%

Stop Target: None

Action: We got our close below $210 and the 50-day moving average, as Thursday’s low touched $209.77. Additional support is at $208 and the 100-day moving average. Resistance is at $213.

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


Rambus (RMBS, $15.33, up $0.48)

RMBS August 16 calls (RMBS150821C00016000, $0.59, up $0.17)

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

Exit Target: $1.40

Return: 7%

Stop Target: None

Action: The next layers of resistance are at $15.50-$15.75 following the close above $15.25. Support is at $15-$14.75.

RMBS was named Citi’s top pick in the semiconductor sector, as an analyst sees a major deal between Rambus and Intel (INTC) coming. It has a price target of $17.50 on shares of RMBS. If this target is achieved by mid-April, these call options would be $1.50 in the money, and the return would be pushing 200%.

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


Microsoft (MSFT, $45.65, up $0.02)

MSFT July 47 calls (MSFT150717C00047000, $0.35, flat)

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

Exit Target: $1.50

Return: -53%

Stop Target: None

Action: Resistance is at $47. Yesterday’s high reached $46.06. Support is at $45.50-$45 and the 50-day moving average.


Wells Fargo (WFC, $57.17, down $0.37)

WFC July 60 calls (WFC150717C00060000, $0.10, down $0.05)

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

Exit Target: $0.50

Return: -50%

Stop Target: None

Action: Support at $57 was tested following Thursday’s dip to $57.13. Resistance is at $58-$58.50 and Tuesday’s all-time high of $58.26.


Rigel Pharmaceuticals (RIGL, $3.41, up $0.01)

RIGL September 5 calls (RIGL150918C00005000, $0.28, up $0.03)

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

Exit Target: $0.80

Return: -30%

Stop Target: None

Action: Shares rebounded to test resistance at $3.50 and the 100-day moving average following Monday’s surge to $3.54. Although there has been a slight pullback since, a move above these levels would be bullish. Support is at $3.25-$3.

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


Sony (SNE, $31.15, up $0.64)

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

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

Exit Target: $0.90

Return: -56%

Stop Target: None

Action: Shares cleared near-term resistance at $31 and the 50-day moving average on Thursday’s 2% pop. A move above $32.50 should get the trade back to even. Support is at $29-$28.50 and the 100-day moving average if $30 fails to hold.


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.

United Parcel Service (UPS) July 105 calls (from 6/11/15) — Continue to hold.

United Parcel Service (UPS) October 110 calls (from 6/11/15) — Continue to hold.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options