Dear Momentum Options Subscriber,
The market has traded in a tight range today with weakness to the downside as Wall Street prepares for tomorrow’s Nonfarm Payrolls report.
The Dow is down 17 points to 16,882 while the S&P 500 is lower by a point to 1,986. The Nasdaq is slipping 7 points to 4,696 and the Russell 2000 is gaining 6 points to 1,071.
I’m a little short on commentary as I want to talk about our new trade that we entered today. I also have a Profit Alert on WFM and I have been busy looking at more setups.
Momentum Options Play List
Closed Trades for 2016: Daily 22-4 (85%) All trades are dated and time stamped so new subscribers can look at the past history to see how the trades have played out each and every day.
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 2:15 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.
Hertz Global Holdings (HTZ, $10.07, up $0.14)
HTZ April 11 calls (HTZ160415C00011000, $0.55, up $0.05)
Entry Price: $0.55 (2/26/2016)
Exit Target: $1.10
Stop Target: None
Action: The options opened at $0.55 cents and have traded in a range of $0.45-$0.60 cents.
Shares have made a nice recovery off their recent low of $7 that formed as a double-bottom in February. The rebound towards the 50-day moving average and I’m looking for shares to makes a strong move above this level.
Yesterday’s high reached $10.02 and continued closes above the $10 level should lead towards a run at $13.50-$13.75 and the 100-day moving average. If shares trade past $12 by mid-April, these options will easily double. A test to $13 could lead to a monster triple-digit return. Support is at $9.50-$9.25. A close below $9 would ruin the current momentum.
Whole Foods Market (WFM, $32.67, down $0.08)
WFM April 33 calls (WFM160415C00033000, $1.07, flat)
Entry Price: $0.54 (2/26/2016)
Exit Target: $1.50
Stop Target: $0.85 cents (Stop Limit)
Action: The Stop Limit at $0.85 cents triggered on today’s pullback to $31.92.
Green Dot (GDOT, $21.57, up $0.35)
June 22.50 calls (GDOT160617C00022500, $1.30, flat)
Entry Price: $0.70 (2/24/2016)
Exit Target: $1.75-$2.10 (Limit Order on half at $1.75)
Stop Target: $1.05 (Stop Limit)
Action: Resistance is at $21.50 and the 52-week high of $21.62. A move above the latter could lead to a quick run to $22-$24. Support is at $20.50-$20.
Oracle (ORCL, $37.72, down $0.04)
ORCL April 40 calls (ORCL160415C00040000, $0.40, flat)
Entry Price: $0.40 (2/22/2016)
Exit Target: $0.80
Stop Target: None
Action: Support is at $37.50-$37. Resistance is at $38.25 and the 200-day moving average.
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, $13.51, up $0.10)
BAC April 14 calls (BAC160415C00014000, $0.38, up $0.02)
Entry Price: $0.30 (2/9/2016)
Exit Target: $0.60
Stop Target: None
Action: Resistance is at $13.50. A move above $13.75 could lead to a run towards $14-$14.25 and the 50-day moving average. Support is at $13.25-$13.
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.
Editor and Chief Options Strategist