In This Issue:
Dear Momentum Stocks Weekly Subscriber,
Wednesday’s action was choppy throughout most of the session before a late day push into positive territory. The Financial stocks were strong with the small-caps producing even stronger results. Volatility also fell below a key level of support and confirmed higher highs are still be in play.
The Dow gained 34 points, or 0.2%, to settle at 16,899. The blue-chips tested a low of 16,766 shortly after the open with support at 16,600 holding. The bulls tapped 16,900 ahead of the closing bell but fell shy of resistance at 17,000-17,200.
The S&P 500 climbed 8 points, or 0.4%, to close at 1,986. The index traded down to 1,968 with rising support at 1,965-1,960 hanging strong. The rebound to session highs keeps 2,000-2,010 in play. A move above the latter could lead to a push towards 2,025.
The Nasdaq added nearly 14 points, or 0.3%, to end at 4,703. Tech fell to a low of 4,665 intraday but easily held support at 4,650. The rebound and close above 4,700 was a bullish signal and gets 4,750-4,800 on the map.
The Russell 2000 soared 11 points, or 1%, to finish at 1,065. The small-caps were a little soft on the open after slipping 2 points to 1,052. Support at 1,050 held before the index also went out near its session high. I mentioned the bulls had a shot at 1,065-1,075 on continued strength. A move 1,080 would be a very bullish signal that a run towards 1,100 could come over the next few weeks.
The S&P 500 Volatility Index ($VIX, 17.09, down 0.61) fell another 3% after peaking at 18.41 in early trading. The backtest failed resistance at 18.50 and the 200-day moving average and was a great clue higher highs could be in store. I mentioned the next layers of support are at 17.50-16.50. A close below the latter should get 15 in play and where a possible short-term top could start to set in.
Momentum Stocks Weekly Play List
All prices given in this update are current as of Mar. 3, 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, $2.46, up $0.02)
Original Entry Price: $4.50 (2/2/2016)
Lowered Price from Selling Options: None Exit Target: $6
Return: -45%
Stop Target: $2
Action: Support is at $2.50-$2.35 and the 50-day moving average. Resistance is at $2.70-$2.75.
Lattice Semiconductor (LSCC, $5.71, down $0.20)
Original Entry Price: $6.77 (12/29/2015) Lowered Price from Selling Options: $6.77 Exit Target: $9
Return: -16%
Stop Target: $3.50 (Stop Limit)
Action: Support is at $5.50-$5.25. Resistance is at $6.
Relypsa (RLYP, $14.31, up $0.85)
Sold RLYP March 30 call (RLYP130318C00030000, $0.10, down $0.05)
Original Entry Price: $28.29 (12/28/2015) Lowered Price from Selling Options: $25.49 Exit Target: $30+
Return: -44%
Stop Target: $14
Action: Support is at $14-$13.50. Resistance is at $15.
You can read my detailed write-up on RLYP from the Jan. 4. Issue.
Planet Fitness (PLNT, $14.71, up $0.46)
Entry Price: $17.85 (9/16/2015)
Lowered Price from Selling Options: None Exit Target: $22
Return: -18%
Stop Target: $12
Action: Resistance is at $14.75-$15 and the 50-day moving average. Support is at $14.24-$14.
Earnings are due out today and I will cover their numbers over the weekend.
You can read my write-up PLNT in the Nov. 16 Issue .
Rave Restaurant Group (RAVE, $5.20, up $0.05)
Original Entry Price (First Position): $13.92 (7/9/2015)
Lowered Price from Selling Options: None Exit Target: $20
Return: -63%
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: -56%
Stop Target: $4.00
Action: Resistance is at $5.25-$5.50. Support $5-$4.75. I will be updating RAVE’s story next Monday, as well.
You can read my most recent write-up on RAVE in the Dec. 24 Issue.
Rigel Pharmaceuticals (RIGL, $2.45, up $0.13)
Original Entry Price: $3.51 (6/2/2015)
Lowered Price from Selling Options: None Exit Target: $4.00-$5.00
Return: -30%
Stop Target: $2.00 (Stop Limit)
Action: Resistance is at $2.50-$2.60. Support $2.35-$2.25.
Psychemedics (PMD, $12.89, up $0.09)
Original Entry Price: $15.67 (5/5/2015)
Lowered Price from dividends: $15.07
Exit Target: $15.75 (Limit Order)
Return: -15%
Stop Target: $7.75 (Stop Limit)
Dividend Yield: 4.8%
Action: Resistance is at $13-$13.50. Support is $12.50-$12.
The dividend of $0.15 a share was recently paid that lowered our cost basis to $15.07. This was our third dividend payment.
Huttig Building Products (HBP, $3.55, up $0.04)
Original Entry Price: $4.00 (8/13/2014)
Lowered Price from Selling Options: No options available Exit Target: $6.00+
Return: -11%
Stop Target: $2.00 (Stop Limit)
Action: Resistance is at $3.60-$3.70. Support is at $3.40 and the 200-day moving average followed by $3.30 and the 50/100-day moving averages.
Rambus (RMBS, $13.20, down $0.02)
Original Entry Price: $17.83 (11/14/2011)
Lowered Price from Selling Options: $16.38
Exit Target: $15.00+
Return: -19%
Stop Target: $9.00
Action: Resistance is at $13.25-$13.50. Support is at $12.75-$12.50 and the 200-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.
Zynga (ZNGA, March 2014) – Continue to hold.
Trade on!
Rick Rouse
Editor
Momentum Stocks Weekly
