Dear Momentum Options Subscriber,

My weekend research showed that a continued pullback was in store for the market this week, and I mentioned in this morning’s Pre-Market Update that the January and August lows could come into play.

The market started today’s session deep in negative territory, and it has proceeded to cascade lower since the open. A continued selloff in oil prices and fear about bankruptcies for some companies in the sector sparked today’s pullback.

Financial stocks are also suffering, as the sector is down over 2% today. Some of the financial names are getting cheap, and a number of bank stocks are now trading below book value. Although it is a little early to go long with call options, I have a number of bullish plays on my watch list to take advantage of the selloff when the time is right.

The Dow is currently declining 387 points to 15,817, while the S&P 500 is down 48 points to 1,831. The Nasdaq is falling 137 points to 4,225, and the Russell 2000 is sliding 27 points to 958.

I could have a New Trade ahead of the closing bell this afternoon, so stay ready in case I take action. For now, let’s go check on our current trades.

Momentum Options Play List

Closed Momentum Options Trades for 2016: 16-2 (89%). 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 2:10 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.


Wal-Mart Stores (WMT, $66.39, down $0.61)

WMT March 60 puts (WMT160318P00060000, $0.70, up $0.09)

Entry Price: $0.65 (2/4/2016)

Exit Target: $1.00-$1.30 (Limit Order on first half at $1.00)

Return: 8%

Stop Target: None

Action: Support is at $66.50 and the 200-day moving average, followed by $65. Resistance is at $68.


Rambus (RMBS, $11.80, down $0.20)

RMBS March 13 calls (RMBS160318C00013000, $0.22, down $0.08)

Entry Price: $0.35 (2/2/2016)

Exit Target: $0.70

Return: -37%

Stop Target: None

Action: Support is at $11.75, followed by $11.65-$11.50 and the 50- and 100-day moving averages. Resistance is at $12-$12.25.

You can read my extended write-up in the Feb. 2 Pre-Market Update.


Opko Health (OPK, $7.64, down $0.62)

OPK March 7 puts (OPK160318P00007000, $0.40, up $0.15)

Entry Price: $0.35 (1/25/2016)

Exit Target: $0.70

Return: 14%

Stop Target: None

Action: Support is at $7.50. Resistance is at $8.

You can read my earlier write-up in the Jan. 26 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.

Garmin (GRMN) February 30 puts — Continue to hold.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options