Dear Momentum Options Subscriber,

The financial stocks are leading today’s pullback following a weak open and another backtest to support. European stocks closed in the red for the day, but the major U.S. indices are now off of their lows.

Volatility is elevated once again, as the whacky action just ahead of the closing bell last Thursday offered a good clue that trading could be rough today.

The Dow is currently down 32 points to 17,520, while the S&P 500 is lower by 6 points to 2,054. The Nasdaq is off 17 points to 5,031, and the Russell 2000 is fading 9 points to 1,145. The S&P 500 Volatility Index ($VIX, 17.26, up 1.52) is up 10%.

I have updated our current positions below, including a chart and the parameters for today’s New Trades in Garmin (GRMN).

I am also closing three of our current trades this afternoon, including two that are listed in the “Trades on Hold” section, so please be sure to check those out.

Stay locked and loaded into the closing bell in case I take additional action.

Momentum Options Play List

Closed Momentum Options Trades for 2015: 98-44-2 (68%). 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 1:45 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.

 

Medtronic (MDT, $77.38, down $0.25)

MDT January 80 calls (MDT160115C00080000, $0.21, down $0.20)

Entry Price: $0.72 (12/8/2015)

Exit Target: $1.45

Return: -71%

Stop Target: None

Action: Sell to close the MDT January 80 calls at current levels. I wanted to see a move above $78, but today’s pullback has forced us out of the position.

 

Garmin (GRMN, $36.87, down $0.11)

GRMN January 38 calls (GRMN160115C00038000, $0.40, down $0.05)

Entry Price: $0.38 (12/28/2015)

Exit Target: $0.80

Return: 5%

Stop Target: None

 

GRMN April 40 calls (GRMN160415C00040000, $0.85, flat)

Entry Price: $0.80 (12/28/2015)

Exit Target: $1.60

Return: 6%

Stop Target: None

Action: Shares cleared their 50- and 100-day moving averages last week. Short-term resistance is at $38-$39. A push past $40 and the 200-day moving average is possible on a close above the latter. Fresh support is at $36.

 

iRobot (IRBT, $36.01, down $0.08)

IRBT January 37 calls (IRBT160115C00037000, $0.55, down $0.05)

Entry Price: $0.65 (12/22/2015)

Exit Target: $1.30

Return: -15%

Stop Target: None

 

IRBT March 40 calls (IRBT160318C00040000, $1.00, down $0.09)

Entry Price: $1.05 (12/22/2015)

Exit Target: $2.10

Return: -5%

Stop Target: None

Action: Support is at $36-$35.50. Near-term resistance is at $37.50-$38.

 

General Electric (GE, $30.99, up $0.16)

GE January 31 calls (GE160115C00031000, $0.37, flat)

Entry Price: $0.47 (12/16/2015)

Exit Target: $1.00

Return: -21%

Stop Target: None

 

GE February 32 calls (GE160219C00032000, $0.35, up $0.01)

Entry Price: $0.40 (12/16/2015)

Exit Target: $0.80

Return: -13%

Stop Target: None

Action: Resistance is at $31 and the 52-week high of $31.23. Support is at $30-$29.50 and the 50-day moving average. A move past $31.25 could lead to a breakout to $32-$33.

You can read my detailed write-up on GE in the Dec. 17 Pre-Market Update.

 

Intel (INTC, $34.82, down $0.16)

INTC January 36 calls (INTC160115C00036000, $0.29, down $0.13)

Entry Price: $0.60 (12/9/2015)

Exit Target: $1.20

Return: -52%

Stop Target: None

Action: Support is at $34.50, followed by $34 and the 50-day moving average. Resistance is at $35.25-$35.50.

You can read more about my thoughts on INTC in the Dec. 10 Pre-Market Update.

 

Trades on Hold — other 2015 Portfolio Open positions (4): 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.

Halliburton (HAL) January 40 calls — Sell to close the trade at current levels.

Corning (GLW) January 20 calls — Sell to close the trade at current levels.

SPDR Gold Shares (GLD) January 95 puts — I would like to see a close below $102 by Tuesday. If not, I will likely exit the trade to save the remaining premium — Continue to hold.

MGM Resorts International (MGM) January 25 calls — Shares are holding their 50-day moving average. We will need a close above $23.50-$24 by Wednesday to possibly keep this trade open going into 2016 — Continue to hold.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options