Dear Momentum Options Subscriber,

Futures were weak throughout the night, but they improved ahead of this morning’s open. This was a positive sign, and the early-morning weakness turned positive as the bulls pushed higher highs. If the gains hold, the bulls will get their second-straight Monday win.

This week is light on the earnings front but heavy on economic news. Notable companies reporting earnings include Autozone (AZO) on Tuesday, Costco Wholesale (COST) on Wednesday, Ambarella (AMBA) on Thursday and Big Lots (BIG) on Friday.

There are a number of other companies reporting earnings this month, but the names listed above are the ones I like for possible trades. Earnings from the fourth-quarter of 2015 will slow dramatically over the next few weeks as companies prepare for the start of first-quarter earnings season, which will begin in early April.

The Dow is currently higher by 55 points to 16,695, while the S&P 500 is gaining 6 points to 1,954. The Nasdaq is adding 21 points to 4,612, and the Russell 2000 is up 6 points to 1,043.

I covered a ton of charts and our game plan for the week in this morning’s Pre-Market Update. I’m excited about the month of March, and I have been busy reviewing my watch list this morning. I’m going through my ideas and doing the math to find the best setups for us. I hope to have another New Trade ahead of the close today, so stay locked and loaded in case I take action. In the meantime, let’s go check on our current positions.

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 12:55 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.

 

Whole Foods Market (WFM, $31.48, up $0.38)

WFM April 33 calls (WFM160415C00033000, $0.68, up $0.10)

Entry Price: $0.54 (2/26/2016)

Exit Target: $1.10

Return: 26%

Stop Target: None

Action: Resistance is at $31.50-$32. A move above the latter could lead to a run to $33-$34 and the 200-day moving average. Short-term support is at $30.50-$30.

You can read my detailed write-up in this morning’s Pre-Market Update.

 

Green Dot (GDOT, $20.59, down $0.28)

GDOT June 22.50 calls (GDOT160617C00022500, $1.00, down $0.20)

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

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

Return: 43%

Stop Target: $0.80 (Stop Limit)

Action: Support is at $20.25-$20. Resistance is at $21 and the 52-week high of $21.62.

 

Oracle (ORCL, $37.15, up $0.19)

ORCL April 40 calls (ORCL160415C00040000, $0.32, down $0.02)

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

Exit Target: $0.80

Return: -20%

Stop Target: None

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

You can read my detailed write-up in the Feb. 23 Pre-Market Update. Earnings are due out in a few weeks.

 

Bank of America (BAC, $12.79, up $0.09)

BAC March 13 calls (BAC160318C00013000, $0.30, up $0.02)

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

Exit Target: $0.80

Return: -25%

Stop Target: None

 

BAC April 14 calls (BAC160415C00014000, $0.20, flat)

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

Exit Target: $0.60

Return: -33%

Stop Target: None

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

 

Rambus (RMBS, $13.09, up $0.11)

RMBS March 13 calls (RMBS160318C00013000, $0.40, up $0.04)

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

Exit Target: $0.70

Return: 14%

Stop Target: None

Action: Resistance is at $13-$13.25. Support is at $12.75-$12.50 and the 200-day moving average.

 

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) — Continue to hold the second half.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options