Dear Momentum Options Subscriber,
The bulls held positive territory into Wednesday’s close, with tech leading the way higher. However, the push towards resistance stalled as Wall Street waited for news on interest rates from overseas.
The Dow gained 36 points, or 0.2%, to close at 17,000. The blue-chips traded down to 16,947 intraday, with support at 16,900-16,800 holding. The run to 17,048 fell shy of resistance at 17,100-17,200.
The S&P 500 advanced 10 points, or 0.5%, to end at 1,989. The index held positive territory throughout the session and tested a high of 1,992. Resistance at 1,990-2,000 was challenged but not cleared. Support remains at 1,975-1,970.
The Nasdaq climbed 25 points, or 0.5%, to finish at 4,674. Tech was slightly weak on the open after falling a six-pack to 4,642. Shaky support at 4,625-4,600 is waiting in the wings on another move below 4,650. The rebound to 4,676 pushed resistance at 4,675-4,700. A close above the latter would be a bullish signal for Friday and next week.
The Russell 2000 added nearly 5 points, or 0.5%, to settle at 1,072. The small-caps stayed strong throughout the session despite the bears’ one-point punch that held 1,067 shortly after the opening bell. Support at 1,065-1,060 easily held before the index reached a peak of 1,074. Resistance is at 1,075-1,080, and a close above the latter would be a bullish setup.
The S&P 500 Volatility Index ($VIX, 18.34, down 0.33) closed lower following three up-days in a row. The bears pushed a high of 19.11, with resistance at 19.50-20 holding. The low of 18.31 fell shy of pushing support at 17.50.
Yesterday’s tight trading range wasn’t fun to watch, but it offered some clues on how the rest of this week and next might play out. If the bulls can show some follow-through today, I may have a New Trade or two to get into, so stay close to your email inboxes throughout the morning in case I take action.
From desk to press, futures look like this: Dow (+51); S&P 500 (+8); Nasdaq 100 (+17); Russell (+4).
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 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.
CVS Health (CVS, $100.52, up $1.48)
CVS April 105 calls (CVS160415C00105000, $0.57, up $0.24)
Entry Price: $0.45 (3/4/2016)
Exit Target: $0.90
Stop Target: $0.47 (Stop Limit)
Action: Set a Stop Limit at $0.47 to protect profits.
The close above $100 and the 200-day moving average was bullish and sets up a run to $102-$104. Support has moved up to $100-$99.50, with backup at $98.
You can view a detailed chart for CVS and read my write-up in the March 7 Pre-Market Update.
Rambus (RMBS, $13.06, up $0.07)
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: Wednesday’s high reached $13.34. Resistance is at $13.25-$13.50. 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, $30.87, up $0.31)
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. Yesterday’s peak reached $31.04. 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.
Green Dot (GDOT, $21.92, down $0.06)
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