Dear Momentum Options Subscriber,
My main message from this morning’s update was to watch the small-caps today and this week. The symmetrical triangle I outlined in the Russell 2000 chart in the Pre-Market update is significant, but how the action could play out is what we really have to follow. This pattern could take another week or so before the possible big market move comes, and we just have to make sure we are on the right side of the breakout or breakdown with our trades.
I’m expecting a slight uptrend this week and a possible bigger move next week as Wall Street and fund managers get back to a full week of work. Volume should be light with the shortened trading week. It will also be the turn into December and the suits-and-ties will need to show some positive yearly results for their clients.
This could lead to some buying pressure for them and a bullish environment for us. However, if the market starts to slide in early December, fund managers might stay on the sidelines and decide to tell their clients, “2015 was a tough year for the market.”
The Dow is up 3 points to 17,827 while the S&P 500 is gaining 4 points to 2,093. The Nasdaq is higher by 14 points to 5,119 and the Russell 2000 is climbing 8 points to 1,183.
I have updated our current trades, and I’m working on another candidate that could be ready today. Stay locked-and-loaded into the closing bell.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 93-38-2 (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 1:10 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.
Corning (GLW, $19.18, up $0.20)
GLW (2016) January 20 calls (GLW160115C00020000, $0.44, up $0.07)
Entry Price: $0.44 (11/23/2015)
Exit Target: $1.00
Stop Target: None
Action: The chart from the original New Trade alert shows a rising 50-day moving average on track to surpass a leveling out 100-day moving average. This would form a “mini” golden cross despite a still descending 200-day moving average just below $20.
Near-term resistance is at $19.50-$19.75. A close above the latter and the 200-day moving average would be a bullish setup to the low $20s. Support is at $18.75-$18.50 if $19 fails to hold.
The company announced an accelerated $1.25 billion share repurchase agreement in late October. I would imagine they are buying shares during the current quarter and into yearend. This is why I went with January options and to get a few trades into 2016 going.
Harris (HRS, $83.06, up $0.28)
HRS December 85 calls (HRS151218C00085000, $1.05, down $0.03)
Entry Price: $1.25 (11/19/2015)
Exit Target: $2.50
Stop Target: Shares traded to a high of $83.95 on Friday before fading to $82.60 into the close.
Action: Resistance is at $84. The 52-week and all-time record high is at $84.78. A move past $84-$85 gets $90 in play on a blue-sky breakout. Support is at $83-$82.50.
Wells Fargo (WFC, $55.81, down $0.01)
WFC December 57.50 calls (WFC151218C00057500, $0.31, down $0.06)
Entry Price: $0.38 (11/18/2015)
Exit Target: $0.80
Stop Target: None
Action: Near-term resistance is at $56-$56.50. Support is at $54 and the 100- and 200-day moving averages.
You can read my write-up on WFC in the Nov. 19 Pre-Market Update.
Jabil Circuit (JBL, $25.40, up $0.19)
JBL December 25 calls (JBL151218C00025000, $1.48, up $0.13)
Entry Price: $0.65 (11/10/2015)
Exit Target: $1.75.
Stop Target: $1.00. (Stop Limit)
Action: Continued closes above $25 should lead to a run toward $27-$28 over the near-term. Support is at $24.50 followed by $24.
You can read my detailed write-up on JBL in the Nov. 10 Mid-Market Update.
PowerShares QQQ Trust (QQQ, $114.54, up $0.06)
QQQ December 117 calls (QQQ151218C00117000, $0.57, down $0.10)
Entry Price: $0.63 (11/10/2015)
Exit Target: $1.30
Stop Target: None
Action: Resistance is at $115-$115.50. Support is at $113-$112.50.
Comcast CMCSA, $62.36, down $0.54)
CMCSA December 65 calls (CMCSA151218C00065000, $0.35, down $0.16)
Entry Price: $0.74 (11/3/2015)
Exit Target: $1.50
Stop Target: None
Action: Resistance is at $63-$63.25. Support is at $61.50 followed by $60 and the 50- and 100-day moving averages.
You can read my detailed write-up on CMCSA in the Nov. 4 Pre-Market Update.
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.
Hilton Worldwide Holdings (HLT) December 27 calls — Continue to hold.
iShares Russell 2000 (IWM) December 124 calls — Continue to hold.
Editor and Chief Options Strategist
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