Dear Momentum Options Subscriber,
The market has been trading in a tight range today, but the bulls have controlled the majority of the action. While today’s session is slightly encouraging, the final hour of trading could be crucial in determining how the rest of the week plays out.
The three-week rally has stalled, but a positive close today will keep the bulls in position to win the week. Economic news and earnings will be light on Thursday and Friday, so technical patterns should come into play instead of emotion.
The Dow is currently up 20 points to 16,984, while the S&P 500 is gaining 7 points to 1,986. The Nasdaq is adding 18 points to 4,665, and the Russell 2000 is climbing 3 points to 1,070.
My watch list is once again exploding with possible trade setups, and I’m still hopeful that we can get into a New Trade today. However, we certainly don’t need to push the action, as our current trades are doing well. If you don’t hear from me by 3:30 p.m. EST today, it means we are standing pat.
Momentum Options Play List
Closed Momentum Options Trades for 2016: 26-4 (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 1:50 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.
Rambus (RMBS, $13.16, up $0.17)
RMBS April 13 calls (RMBS160415C00013000, $0.52, flat)
Entry Price: $0.40 (3/7/2016)
Exit Target: $0.80
Stop Target: $0.45 (Stop Limit)
Action: Resistance is at $13.25. Support is at $12.75-$12.60 and the 200-day moving average if $13 fails to hold.
You can view a chart for RMBS and read my write-up in the March 7 New Trade Alert.
Intel (INTC, $30.89, up $0.33)
INTC April 29 puts (INTC160415P00029000, $0.39, down $0.07)
Entry Price: $0.38 (3/7/2016)
Exit Target: $0.80
Stop Target: None
Action: Short-term resistance is at $31-$31.50. Support is at $30.50-$30.
You can view a chart for INTC and read my write-up in the March 7 New Trade Alert.
CVS Health (CVS, $100.27, up $1.23)
CVS April 105 calls (CVS160415C00105000, $0.50, up $0.17)
Entry Price: $0.45 (3/4/2016)
Exit Target: $0.90
Stop Target: None
Action: Resistance is at $100 and the 200-day moving average. A close above this level would be bullish. Support is at $98, followed by $96.50 and the 100-day moving average.
You can view a detailed chart for CVS and read my write-up in the March 7 Pre-Market Update.
Green Dot (GDOT, $21.90, down $0.08)
GDOT June 22.50 calls (GDOT160617C00022500, $1.70, flat)
Entry Price: $0.70 (2/24/2016)
Exit Target: $2.10 (Limit Order on first half)
Stop Target: $1.40 (Stop Limit)
Action: Support is at $21.75-$21.50. Multi-year resistance is at $22-$24.
Editor and Chief Options Strategist