In This Issue:

Dear Momentum Stocks Weekly Subscriber,

The bulls showed their resiliency on Wednesday following the opening onslaught by the bears. The late-day recovery was a beautiful sight, but upper resistance remains in the picture. Volatility also cooled into the closing bell, but it is still in the danger zone.

The Dow added 53 points, or 0.3%, to end at 16,484. The blue-chips tested a low of 16,165 on the opening weakness, with backup support at 16,200-16,100 holding. The rebound to 16,507 and close above 16,350-16,400 was a bullish sign, and that keeps 16,600-16,650 and the 50-day moving average in play. A move above this level could lead to a quick trip to 16,800-17,000.

The S&P 500 climbed 8 points, or 0.4%, to settle at 1,929. The index traded to a low of 1,891 shortly after the open, with support at 1,900-1,875 standing strong. The recovery to 1,932 and close above 1,925 was a bullish development, but resistance remains at 1,940-1,950 and the 50-day moving average.

The Nasdaq advanced 39 points, or 0.9%, to finish at 4,542. Tech split backup support at 4,450-4,400 with its trip to 4,425 during the morning pullback. The 122-point turnaround to 4,547 pushed near-term resistance at 4,550. Additional hurdles remain at 4,575-4,600 if that resistance is cleared.

The Russell 2000 climbed nearly 10 points, or 1%, to close at 1,022. The small-caps stumbled to a low of 996, with backup support at 990 shining like a penny. The surge to 1,023 afterwards and close between 1,020 and 1,025 keeps 1,035-1,040 in play. A move above the latter would be a strong signal that the rest of the week and the start of March could be bullish.

The S&P 500 Volatility Index ($VIX, 20.72, down 0.26) spiked to 22.87 after the start of trading, with the bulls defending near-term resistance at 22.50-23.50. The VIX stayed slightly elevated for the rest of the session before the final-hour fade to 20.26. We are looking for continued closes below 20 to keep the bears at bay.

I have a lot to talk about this morning, so let’s get to our current trades.

From desk to press, futures look like this: Dow (+13); S&P 500 (+1); Nasdaq 100 (+1); Russell (+0.6).

Chapter 1. Momentum Stocks Weekly Play List

All prices given in this update are current as of Feb. 24, 2016. I hereby disclose that I will be participating in the following trade(s).

The Momentum Stocks Weekly Closed Trade Track Record is 1-2, for a 33% win rate for 2016 (145-27, or 84% win rate, overall since the start of 2011).

View the entire list of open and closed trades by clicking here.

 

Hansen Medical (HNSN, $2.64, down $0.11)

Original Entry Price: $4.50 (2/2/2016)

Lowered Price from Selling Options: N/A

Exit Target: $6.00

Return: -41%

Stop Target: $2.00

Action: Resistance is at $2.75, followed by $3 and the 100-day moving average. Support is at $2.50-$2.25.

 

Lattice Semiconductor (LSCC, $6.51, up $0.62)

Original Entry Price: $6.77 (12/29/2015)

Lowered Price from Selling Options: N/A

Exit Target: $9.00

Return: -4%

Stop Target: $3.50 (Stop Limit)

Action: Shares continued to show strength during yesterday’s 10% spike and push to $6.67. Resistance is at $6.75-$7. The 52-week high is at $7.07. Support is at $6.25-$6.

 

Relypsa (RLYP, $16.78, down $0.41)

Wrote the RLYP March 30 call (RLYP130318C00030000, $0.30, down $0.10)

Original Entry Price: $28.29 (12/28/2015)

Lowered Price from Selling Options: $25.49

Exit Target: $30.00+

Return: -34%

Stop Target: $14.00

Action: Support is at $16.50-$16. Resistance is at $17.

You can read my detailed write-up in the Jan. 4 Issue.

 

Planet Fitness (PLNT, $14.42, up $0.24)

Entry Price: $17.85 (9/16/2015)

Lowered Price from Selling Options: N/A

Exit Target: $22.00

Return: -19%

Stop Target: $12.00

Action: Resistance is at $14.50-$14.75. Support is at $14.24-$14. Earnings are due to be released on March 3, after the close.

You can read my latest write-up on PLNT in the Nov. 16 Issue.

 

Rave Restaurant Group (RAVE, $5.01, up $0.03)

Original Entry Price (First Position): $13.92 (7/9/2015)

Lowered Price from Selling Options: N/A

Exit Target: $20.00

Return: -64%

Stop Target: $4.00

 

Original Entry Price (Second Position): $11.70 (8/17/2015)

Lowered Price from Selling Options: N/A

Exit Target: $13.00+

Return: -57%

Stop Target: $4.00

Action: Support is at $4.75-$4.50. Resistance is at $5.25-$5.50.

You can read my most recent write-up on the company in the Dec. 24 Issue.

 

Rigel Pharmaceuticals (RIGL, $2.34, up $0.02)

Original Entry Price: $3.51 (6/2/2015)

Lowered Price from Selling Options: N/A

Exit Target: $4.00-$5.00

Return: -33%

Stop Target: $2.00 (Stop Limit)

Action: Resistance is at $2.50-$2.60. Support is at $2.35-$2.25.

 

Psychemedics (PMD, $12.16, up $0.06)

Original Entry Price: $15.67 (5/5/2015)

Lowered Price from dividends: $15.22

Exit Target: $15.75 (Limit Order)

Return: -21%

Stop Target: $7.75 (Stop Limit)

Dividend Yield: 4.8%

Action: Resistance is at $12.25-$12.50. Support is at $11.50-$11. The next dividend of $0.15 per share will be paid on March 4.

 

Huttig Building Products (HBP, $3.27, flat)

Original Entry Price: $4.00 (8/13/2014)

Lowered Price from Selling Options: N/A

Exit Target: $6.00+

Return: -18%

Stop Target: $2.00 (Stop Limit)

Action: Resistance is at $3.35-$3.40. Support is at $3.

 

Rambus (RMBS, $12.81, up $0.20)

Original Entry Price: $17.83 (11/14/2011)

Lowered Price from Selling Options: $16.38

Exit Target: $15.00+

Return: -22%

Stop Target: $9.00

Action: Resistance is at $12.50-$12.75. Support is at $12.25-$12, followed by $11.75 and the 100-day moving average.

 

Trades on Hold (1): These are trades that are still open in the portfolio but are down from the original recommended price. These trades are on “hold” and are not a buy until I bring back coverage of the stock. This means I would not open any new positions. I’m still keeping track of the trades and will record the results accordingly when a trade closes. I do not recommend adding to these positions or opening new positions.

Zynga (ZNGA, March 2014) — Continue to hold.

Trade on!

Signed

Rick Rouse
Editor
Momentum Stocks Weekly