“Sign, sign, everywhere a sign
Blockin’ out the scenery, breakin’ my mind
Do this, don’t do that, can’t you read the sign?”

Dear Momentum Options Subscriber,

Wall Street and the talking heads seem surprised by the continued strength the bulls have shown over the past two weeks, but that’s because they have ignored the signs.

Although today’s action has been a little choppy, the bulls are dropping more clues that the current rally will last into March. Nasdaq 4,500, a lower VIX, an up-Monday, the potential for a positive Friday close today and the moves above the 50-day moving averages were confirmation signs I said we needed to watch for this week.

I will be researching the 10-year charts for the major indices this weekend, which will also help shape our game plan, not only for the short term, but for the longer term as well. With the first two months of the year almost in the books, one thing that is certain is that 2016 will be volatile. As an options trader, I couldn’t be happier — because this means that there will be a plethora of opportunities to make money with both call and put options.

Heading into the final hours of trading, the Dow is up 7 points to 16,704, while the S&P 500 is higher by 2 points to 1,953. The Nasdaq is adding 11 points to 4,593, and the Russell 2000 is advancing 7 points to 1,038.

I have updated our current trades below, and I’m doing research on another possible New Trade as well. I hope to have it ready by the close if all systems are go, but we don’t need to push anything. If you don’t hear from me by 3:30 p.m. EST, enjoy the weekend, and I will chat with everyone again on Monday morning.

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 1:40 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, $20.85, up $0.15)

GDOT June 22.50 calls (GDOT160617C00022500, $1.11, up $0.06)

Entry Price: $0.70 (2/24/2016)

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

Return: 59%

Stop Target: $0.80 (Stop Limit)

Action: Resistance is at $21 and the 52-week high of $21.62. A move above these levels could lead to a breakout towards $22-$24. Support is at $20.25-$20.

 

Oracle (ORCL, $37.10, down $0.19)

ORCL April 40 calls (ORCL160415C00040000, $0.32, down $0.06)

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

Exit Target: $0.80

Return: -20%

Stop Target: None

Action: Support is at $37-$36.50. Resistance is at $37.50-$38.

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

 

Bank of America (BAC, $12.84, up $0.52)

BAC March 13 calls (BAC160318C00013000, $0.35, up $0.18)

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

Exit Target: $0.80

Return: -13%

Stop Target: None

 

BAC April 14 calls (BAC160415C00014000, $0.2, up $0.09)

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

Exit Target: $0.60

Return: -27%

Stop Target: None

Action: Resistance is at $13. Support has moved up to $12.75-$12.50.

 

Rambus (RMBS, $12.99, up $0.02)

RMBS March 13 calls (RMBS160318C00013000, $0.39, flat)

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

Exit Target: $0.70

Return: 11%

Stop Target: None

Action: Resistance is at $13-$13.25. 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. Save 60% Today. The sale is officially over, but I’m going to give you another chance to lock in these deep savings. Some of the best trading opportunities are dead ahead, and we’re going to capture plenty of profits. Renew today and 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.