Dear Momentum Options Subscriber,

Shares of Jabil Circuit (JBL, $23.51, down $0.54) have been in a solid uptrend since late September after the company reported fantastic earnings. The company posted a profit of $0.53 a share on revenue of $4.68 billion. Wall Street was looking for $0.45 a share on revenue of $4.55 billion.

Its next earnings announcement is scheduled for mid-December, and Jabil is expecting to earn $0.80 a share on revenue of $5.22 billion. Analysts had to adjust their targets for current-quarter earnings from a prior $0.61 a share after the company said it would earn between $0.72 and $0.88 a share.

Jabil also gave 2016 guidance of $2.60 a share on sales of $20 billion. The suits-and-ties were looking for $2.37 a share on revenue of $19.3 billion.

The 52-week high of $24.95 was triggered in mid-May, and a move above this level could lead to a blue-sky breakout towards $30.

Jabil should benefit from the strong demand for Apple (AAPL)’s new devices, especially the larger iPhones and the upcoming iPad Pro. Overall, Apple makes up roughly 20% of Jabil’s sales, with BlackBerry (BBRY) accounting for over 10% of the company’s revenues.

Jabil Circuit has three segments to its business model. Its Diversified Manufacturing Services (DMS) account for nearly half of the company’s revenue. The main focus of this division is management services for its global customers in regulated industries.

Jabil’s Enterprise and Infrastructure (EI) division provides manufacturing and logistics management to computer, networking, storage and telecom companies like Cisco Systems (CSCO) and IBM (IBM). And, finally, the High Velocity (HV) division focuses on electronics for mobile, set-top boxes, displays and peripherals.

Analysts are mixed-to-slightly-bullish on the stock, as there are five “Hold” ratings and six “Buy” or “Strong Buy” recommendations. Given the company’s recent earnings and raised guidance, I like this stock heading into the end of the year, which is why I suggested that we buy call options.

A “golden cross” is also in the processing of forming, with the 50-day moving average on track to clear the 200-day moving average. The 100-day moving average has also leveled out just below $21. There is risk to $23.50-$23 on continued weakness, but I believe these levels will hold if they are tested.

JBL

I issued a Profit Alert earlier this afternoon, so please check that out now if you haven’t done so already. I have also updated the parameters of our current trades below, including today’s two New Trades.

As far as the market goes today, the bulls are trying to bounce back following Monday’s drubbing, but they are struggling. Near-term support is holding, so today’s close will once again be important.

The Dow is currently lower by 22 points to 17,702, while the S&P 500 is slipping 3 points to 2,075. The Nasdaq is down 30 points to 5,064, and the Russell 2000 is off 5 points to 1,179.

I could have additional trade updates and perhaps another New Trade ahead of the close today. For now, however, let’s go check the tape on our current plays.

Momentum Options Play List

Closed Momentum Options Trades for 2015: 92-37-2 (70%). 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 12:40 p.m. EST.

I hereby disclose that I will be participating in the following trade(s). Every 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.

 

Jabil Circuit (JBL, $23.51, down $0.54)

JBL December 25 calls (JBL151218C00025000, $0.65, down $0.22)

Entry Price: $0.65 (11/10/2015)

Exit Target: $1.30

Return: 0%

Stop Target: None

Action: Support is at $23.50-$23. Resistance is at $24-$24.25.

 

PowerShares QQQ Trust (QQQ, $113.08, down $0.49)

QQQ December 117 calls (QQQ151218C00117000, $0.63, down $0.21)

Entry Price: $0.63 (11/10/2015)

Exit Target: $1.30

Return: 0%

Stop Target: None

Action: Support is at $113-$112.50. Resistance is at $113.50-$114.

 

Hilton Worldwide Holdings (HLT, $25.53, up $0.08)

HLT December 27 calls (HLT151218C00027000, $0.35, down $0.01)

Entry Price: $0.45 (11/5/2015)

Exit Target: $1.00

Return: -22%

Stop Target: None

Action: Support is at $25, followed by $24.50 and the 50-day moving average. Near-term resistance is at $26.

You can read my detailed write-up on HLT in yesterday’s Pre-Market Update.

 

iShares Russell 2000 (IWM, $117.60, down $0.22)

IWM December 124 calls (IWM151218C00124000, $0.34, down $0.10)

Entry Price: $0.58 (11/5/2015)

Exit Target: $1.20

Return: -41%

Stop Target: None

Action: Support is at $118-$117.50 and the 100-day moving average. Short-term resistance is at $120 and the 200-day moving average.

 

Comcast (CMCSA, $61.72, up $0.37)

CMCSA December 65 calls (CMCSA151218C00065000, $0.48, up $0.01)

Entry Price: $0.74 (11/3/2015)

Exit Target: $1.50

Return: -35%

Stop Target: None

Action: Short-term resistance is at $62-$62.50. Near-term support is at $61-$60 and the 100-day moving average.

You can read my detailed write-up on CMCSA in the Nov. 4 Pre-Market Update.

 

Corning (GLW, $18.76, up $0.12)

GLW November 19 calls (GLW151120C00019000, $0.20, down $0.04)

Entry Price: $0.60 (9/16/2015)

Exit Target: $1.20

Return: -67%

Stop Target: None

Action: Resistance is at $19-$19.25. Support is at $18.25-$18 and the 100-day moving average.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options