Dear Momentum Options Subscriber,

The market was slightly weak at Monday’s open, as futures were showing a pullback throughout the night. The good news was that a rebound ensued, and this type of pattern has played out for a few weeks now. During the market pullback from January to mid-February, futures often pointed towards a higher open before the bulls eventually gave back their gains following the opening hour of trading.

The Dow advanced 67 points, or 0.4%, to finish at 17,073. The blue-chips slipped to a low of 16,940, but fresh support at 16,900-16,800 held strong. The bounce to 17,099 split upper resistance at 17,000-17,200. A move above the latter could lead to 17,350-17,400.

The S&P 500 added nearly 2 points, or 0.1%, to settle at 2,001. The index tested support at 1,990-1,985 following the morning trip to 1,989. A close below 1,985 could lead to a backtest to 1,975-1,970. The rebound to 2,006 afterwards failed to clear near-term resistance at 2,020-2,025.

The Nasdaq slipped 8 points, or 0.2%, to close at 4,708. Tech was the weakest link on Monday, as the index traded down to 4,674 intraday. Support at 4,675-4,650 held, but there is risk to 4,625-4,600 and the 50-day moving average on a breach below the latter. Near-term resistance at 4,750-4,800 held following the intraday run to 4,731.

The Russell 2000 jumped a dozen points, or 1.1%, to end at 1,094. The small-caps were weak on the open, but they regained their strength after bottoming at 1,077. Support at 1,075-1,070 held before the 4-point loss was quickly erased. The rest of the session was spent in positive territory, with the bulls pushing a peak of 1,094.50. Resistance at 1,100 is within spitting distance, and a break above that level could lead to a push towards 1,115-1,125.

The S&P 500 Volatility Index ($VIX, 17.35, up 0.49) edged higher and tested a high of 18.04, although resistance at 18.50 and the 200-day moving average held. Support remains at 16.50-15, and a close below the latter would confirm that higher market highs are in store. However, the action feels a little bearish, so I have once again raised the Stop Targets on a few of our bullish positions to protect profits.

The same factors that have helped us play the upside rally with incredible results should give us great clues on when a possible top might be reached. While it is a little early to load up on put positions, I may start nibbling on bearish setups in stocks that haven’t participated in the recent three-week rally.

As a reminder, I will be including the Momentum Q&A section in tomorrow’s Pre-Market Update, which will give you the opportunity to ask me questions about the market and our current trades. To submit your questions, simply send your messages to, and I will do my best to address them every Wednesday morning.

As a reminder, the SEC’s guidelines prohibit me from answering any questions about securities that are not currently on our Momentum Options buy list or from providing individualized trading advice or recommendations for any specific subscriber or portfolio.

I encourage you to send in any questions that I can help with, particularly those that may benefit the broad Momentum Options audience.  If you have a question, chances are there are a handful of other subscribers who may have the same one! Thanks, and I look forward to hearing from you!

From desk to press, futures look like this: Dow (-47); S&P 500 (-7); Nasdaq 100 (-18); Russell (-4).

Momentum Options Play List

Closed Momentum Options Trades for 2016: 24-4 (86%). 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 8:00 a.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.


Rambus (RMBS, $13.06, down $0.21)

RMBS April 13 calls (RMBS160415C00013000, $0.58, down $0.22)

Entry Price: $0.40 (3/7/2016)

Exit Target: $0.80

Return: 45%

Stop Target: $0.42 (Stop Limit)

Action: Set a Stop Limit at $0.42 to protect profits.

Support is at $12.75-$12.60 and the 200-day moving average. Yesterday’s low touched $12.61. There is risk to $12 and the 50-day moving average on a move below $12.50. Resistance is at $13.25-$13.50 following the close above $13, which is what we wanted to see.

You can view a chart for RMBS and read my write-up in yesterday’s New Trade Alert.


Hertz Global Holdings (HTZ, $10.70, up $0.23)

HTZ April 11 calls (HTZ160415C00011000, $0.82, up $0.17)

Entry Price: $0.55 (2/26/2016)

Exit Target: $1.10

Return: 49%

Stop Target: $0.60 (Stop Limit)

Action: Set a Stop Limit at $0.60 to protect profits. Yesterday’s low on the calls was $0.62.

Monday’s high reached $10.82. Resistance is at $10.75-$11. I mentioned that a run to $12-$13 could come on continued short-covering. The 100-day moving average is at $13.50, while support is at $10-$10.25.

You can read my detailed write-up in the March 3 Mid-Market Update.


Green Dot (GDOT, $22.11, up $0.27)

GDOT June 22.50 calls (GDOT160617C00022500, $1.70, up $0.16)

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

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

Return: 143%

Stop Target: $1.20, raise to $1.40 (Stop Limit)

Action: Raise the Stop Limit from $1.20 to $1.40.

Our new Stop Limit will ensure a 100% return on any pullback, but I still believe shares will continue to make higher highs and that the call options will generate even bigger returns on continued strength.

Shares traded to another 52-week peak of $22.28 yesterday. Multi-year resistance is at $22-$24. Support has moved up to $22-$21.75.


Oracle (ORCL, $38.36, up $0.47)

ORCL April 40 calls (ORCL160415C00040000, $0.54, up $0.13)

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

Exit Target: $0.80

Return: 35%

Stop Target: $0.42 (Stop Limit)

Action: Set a Stop Limit at $0.42 to protect profits.

Resistance at $38.25 and the 200-day moving average was cleared on Monday’s run to $28.45. I mentioned that a close above this level should lead to a trip to the low $40s. Support is at $37.50-$37 and the 100-day moving average on a move back below $38.

You can read my detailed write-up in the Feb. 23 Pre-Market Update. Earnings are due to be released on March 15, and I will cover their numbers in the coming days.


Intel (INTC, $30.94, up $0.31)

INTC April 29 puts (INTC160415P00029000, $0.37, down $0.07)

Entry Price: $0.38 (3/7/2016)

Exit Target: $0.80

Return: -3%

Stop Target: None

Action: Short-term resistance is at $31-$31.50. A close above $32 would reverse the bearish setup over the short term. Support is at $30.50-$30. A close below $30 should get $29-$28 in play.

You can view a chart for INTC and read my write-up in yesterday’s New Trade Alert.


CVS Health (CVS, $98.42, down $0.86)

CVS April 105 calls (CVS160415C00105000, $0.30, down $0.13)

Entry Price: $0.45 (3/4/2016)

Exit Target: $0.90

Return: -33%

Stop Target: None

Action: Support is at $98, followed by $96.50 and the 100-day moving average. Resistance is at $100 and the 200-day moving average.

You can view a detailed chart for CVS and read my write-up in the March 7 Pre-Market Update.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options