Dear Momentum Options Subscriber,

Shares of (CRM, $67.51, up $4.99) are having a strong session after reporting better-than-expected results following Wednesday’s close. The company matched Wall Street’s earnings expectations, while revenues came in above forecasts.

Let’s look at what I said about CRM in the Feb. 8 Pre-Market Update when shares were just north of $58:

“ is scheduled to announce earnings on Feb. 24, and I believe they may have had a better quarter than analysts are forecasting. The current estimates are at $0.19 a share on revenue of just under $1.8 billion.

The company has topped or matched estimates during the past four quarters, and the “whisper” earnings number is as high as $0.22 a share on sales of $1.81 billion. A bearish target has the company missing estimates by a penny.

With CRM shares at two-year lows, it is a little too early to establish bullish positions, as the chart shows risk to $55-$50. Fresh resistance is at $60-$62.50.”

Shares traded down to $52.60 and $52.79 over the following two sessions to split the middle of the aforementioned lower levels of support. This was also a great clue that a “double bottom” had formed.

CRM shares closed Wednesday’s session at $62.52, which was right at resistance, and today’s 8% gain has been a bullish boon for the CRM March 60 calls (CRM160318C00060000, $8.00, up $2.75). These calls options were just north of $4 at the time of the Feb. 8 update, and they fell below $3 on the stock’s backtest to the $52.50 level.

Although this wasn’t an official trade for the portfolio, these call options traded to a high of $10.10 on the stock’s run to $70.80 at this morning’s open. If you happen to be in this trade, I would close half of the position to lock in a triple-digit profit. I would also set a Stop Limit at $7 on the second half of the trade. continues to show why its shares should and do trade at a premium. The company is the 800-pound gorilla in the sector, and it has been the subject of numerous takeover rumors.

Heading into the final hours of today’s action, the Dow is advancing 128 points to 16,613, while the S&P 500 is higher by 11 points to 1,941. The Nasdaq is up 14 points to 4,557, and the Russell 2000 is gaining 5 points to 1,027.

I could have a New Trade ahead of the closing bell, so stay locked and loaded in case I take action.

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 2:05 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.


Green Dot (GDOT, $20.34, up $1.12)

GDOT June 22.50 calls (GDOT160617C00022500, $1.10, up $0.21)

Entry Price: $0.70 (2/24/2016)

Exit Target: $1.75-$2.10 (Limit Order on first half at $1.75)

Return: 57%

Stop Target: None

Action: Resistance is at $21, but a move above this level could lead to a breakout towards $22-$24. Support is at $19-$18.75.


Oracle (ORCL, $37.10, up $0.47)

ORCL April 40 calls (ORCL160415C00040000, $0.34, up $0.06)

Entry Price: $0.40 (2/22/2016)

Exit Target: $0.80

Return: -15%

Stop Target: None

Action: Resistance is at $37-$37.50. Support is at $36.50-$36.

You can read my detailed write-up in the Feb. 23 Pre-Market Update.


Bank of America (BAC, $12.28, up $0.15)

BAC March 13 calls (BAC160318C00013000, $0.16, flat)

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

Exit Target: $0.80

Return: -60%

Stop Target: None


BAC April 14 calls (BAC160415C00014000, $0.13, flat)

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

Exit Target: $0.60

Return: -57%

Stop Target: None

Action: Resistance is at $12.25-$12.50. Support is at $12-$11.75.


Rambus (RMBS, $12.87, up $0.06)

RMBS March 13 calls (RMBS160318C00013000, $0.35, up $0.01)

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

Exit Target: $0.70

Return: 0%

Stop Target: None

Action: Resistance is at $13. Support is at $12.75-$12.50.


Trades on Hold — other 2016 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.

Opko Health (OPK) March 7 puts (OPK160318P00007000) — Earnings are due to be released next week. Continue to hold the second half of the position.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options

P.S. Flash Sale — Save up to 60%. I’m committed to helping you build your wealth. That’s why yesterday you received an invitation to save up to 60% on your Momentum Options membership. Some of the best trading opportunities are dead ahead, and I’m expecting us to capture plenty of profits. By renewing today, you’ll not only save big but also receive the brand new special report: 2016 Roadmap: Top Catalysts for Huge Profits that I wrote with a few of my fellow InvestorPlace advisors. In it, you’ll discover where we think the market is heading and some of the hottest stocks and sectors you should get into. Don’t wait. Renew today and get immediate access to the 2016 Roadmap.