Dear Momentum Options Subscriber,

The odds were stacked against the bulls today, and the lackluster action looks bearish at first glance. However, tech and the small-caps are showing some strength, and the VIX is in the 20s.

These are bullish signals, but the final hour of trading will be important to watch. I’ve already started working on my weekend notes, and the good news is that a continued rally could be in store through mid-March. I expect next week to be choppy and for the current trading range to play out until another possible leg higher. However, support is still shaky, so we will need to watch for other clues to gauge market direction.

The Dow is down 41 points to 16,371, while the S&P 500 is lower by a point to 1,916. The Nasdaq is gaining 18 points to 4,505, and the Russell 2000 is popping a six-pack to 1,010. The S&P 500 Volatility Index ($VIX, 20.74, down 0.90) is off 4%.

I issued a Profit Alert for the second half of our position in Emerson Electric (EMR) earlier this afternoon, so be sure to check that out now if you haven’t already.

My watch list is still exploding with ideas as I look to build our next batch of trades into March and April, and I could have a New Trade ahead of the close. If you don’t hear from me by 3:30 p.m. EST, however, have a great and safe weekend!

Momentum Options Play List

Closed Momentum Options Trades for 2016: 20-3 (87%). 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 2:25 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.

 

Bank of America (BAC, $12.10, down $0.14)

BAC March 13 calls (BAC160318C00013000, $0.16, down $0.05)

Entry Price: $0.40 (2/9/2016)

Exit Target: $0.80

Return: -60%

Stop Target: None

 

BAC April 14 calls (BAC160415C00014000, $0.13, down $0.04)

Entry Price: $0.30 (2/9/2016)

Exit Target: $0.60

Return: -57%

Stop Target: None

Action: Short-term support is at $12.25-$12. Resistance is at $12.50-$12.75.

 

Rambus (RMBS, $12.50, up $0.06)

RMBS March 13 calls (RMBS160318C00013000, $0.21, down $0.02)

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

Exit Target: $0.70

Return: -40%

Stop Target: None

Action: Resistance is at $12.50-$12.75. Support is at $12.25-$12.

 

Opko Health (OPK, $8.81, up $0.08)

OPK March 7 puts (OPK160318P00007000, $0.12, flat)

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

Exit Target: $0.70

Return: -66%

Stop Target: None

Action: Resistance is at $9. Support is at $8.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options