Dear Momentum Options Subscriber,

I mentioned in this morning’s Pre-Market Update that third-quarter earnings season will start to wind down over the next few weeks ahead of the Christmas holiday. However, there might be an earnings trade or two this week that could be worth a look.

Infoblox (BLOX, $14.65, down $0.33) is an interesting candidate, and the company is scheduled to announce its quarterly results after the close today. Wall Street is expecting earnings of $0.06 a share on revenue north of $87 million. The company has topped estimates over the past four past quarters by $0.02 (twice), $0.04 and $0.05.

Shares are near their 52-week low of $13.22 that was set last week, and the near-term chart looks horrible. The 50- and 100-day moving averages are in a downtrend, while the 200-day moving average is trying to level out.

Short sellers are applying pressure, but a short-covering rally could produce a short-term bounce to $16.

The BLOX December 15 calls (BLOX151218C00015000, $0.90, down $0.10) are being traded by bullish investors, with volume topping at over 600 contracts so far. The BLOX December 15 puts (BLOX151218P00015000, $1.10, up $0.05) are being targeted by bearish traders on even better volume, as over 3,400 contracts have changed hands today.

Both aforementioned options could be used together to create a “straddle” option trade with a combined cost of $2.00. The breakeven points would come into play if BLOX shares trade to $17 or $13. Anything above or below these levels would translate into profits.

I don’t actively follow BLOX, so I will likely be sitting on the sidelines this afternoon when the company reports. There are other trades that look more tempting this week, however, and I will cover a couple of them over the next few days.

As far as the market goes today, trading has been choppy within a tight range. The Dow is down 39 points to 17,759, while the S&P 500 is lower by 5 points to 2,095. The Nasdaq is giving back 22 points to 5,104, and the Russell 2000 is slipping 3 points to 1,199.

I have updated our current trades below, so let’s go check the action. However, stay locked and loaded into the close in case I take additional action.

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 1:05 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, $18.83, up $0.07)

GLW (2016) January 20 calls (GLW160115C00020000, $0.25, up $0.01)

Entry Price: $0.44 (11/23/2015)

Exit Target: $1.00

Return: -43%

Stop Target: None

Action: Support is at $18.75-$18.50. Resistance is at $19.

You can read my detailed write-up from the Nov. 23 Mid-Market Update.

 

Harris (HRS, $83.43, up $0.33)

HRS December 85 calls (HRS151218C00085000, $0.90, up $0.05)

Entry Price: $1.25 (11/19/2015)

Exit Target: $2.50

Return: -28%

Stop Target: None

Action: Resistance is at $83.25-$83.50. A close above $84 should lead to a blue-sky breakout. Support is at $82.

 

Wells Fargo (WFC, $55.30, down $0.09)

WFC December 57.50 calls (WFC151218C00057500, $0.13, down $0.03)

Entry Price: $0.38 (11/18/2015)

Exit Target: $0.80

Return: -66%

Stop Target: None

Action: Support is at $55, followed by the 100- and 200-day moving averages. Near-term resistance is at $55.50-$56.

You can read my write-up on WFC in the Nov. 19 Pre-Market Update.

 

Jabil Circuit (JBL, $25.57, up $0.09)

JBL December 25 calls (JBL151218C00025000, $1.60, up $0.05)

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

Exit Target: $2.00

Return: 146%

Stop Target: $1.30 (Stop Limit)

Action: Overhead resistance is at $25.75-$26. Support is at $25-$24.50. My near-term target remains at $27-$28.

You can read my detailed write-up on JBL in the Nov. 10 Mid-Market Update.

 

PowerShares QQQ Trust (QQQ, $113.83, down $0.48) up $0.16)

QQQ December 117 calls (QQQ151218C00117000, $0.30, down $0.14)

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

Exit Target: $1.30

Return: -52%

Stop Target: None

Action: Support is at $113-$112.50. Resistance is at $115-$115.50. The all-time high is at $115.47.

 

iShares Russell 2000 (IWM, $119.20, down $0.42)

IWM December 124 calls (IWM151218C00124000, $0.16, flat)

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

Exit Target: $1.20

Return: -72%

Stop Target: None

Action: Support is at $118, followed by $117.50-$17 and the 100-day moving average. Short-term resistance is at $120 and the 200-day moving average. A close above this level could lead to a run to $122 over the near term.

 

Comcast (CMCSA, $61.20, down $0.39)

CMCSA December 65 calls (CMCSA151218C00065000, $0.10, down $0.10)

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

Exit Target: $1.50

Return: -86%

Stop Target: None

Action: Support is at $61-$60.50 and the 50-day moving average. Resistance is at $62.

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

 

Trades on Hold — other 2015 Portfolio Open positions (1): 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.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options