Dear Momentum Options Subscriber,

Futures were forecasting a slightly lower open on Wall Street ahead of today’s session, but the major indices have bounced nicely off of today’s lows. This was a good sign, but, more importantly, I want to see a positive close on the Dow today.

This would be the first sign that our game plan from this morning’s Pre-Market Update is coming together nicely. A slightly lower or flat finish would also be okay as long as rising support holds throughout the week.

Although I mentioned that fourth-quarter earnings have started to fade, the first week of April marks the beginning of first-quarter earnings season. This will become a major catalyst in three weeks, as the market continues to trade higher on expectations that earnings might come in above forecasts.

With negative interest rates starting to pop up and the U.S. dollar remaining strong, this could be a tall order for multinational companies. Currency manipulation is also becoming a problem, and these shenanigans will affect world markets at some point.

These are some of my underlying thoughts for how 2016 might shape up, but there is no need to talk about them in greater detail today. Instead, let’s enjoy this week and see how the action plays out.

The portfolio is super light at the moment, but there is a chance that I could recommend additional short-term bullish trades. I have also started to build a bearish playbook as we head into spring, and put options will become cheaper if the market continues higher.

Turning to the market, the Dow is currently gaining 20 points to 17,233, while the S&P 500 is falling 3 points to 2,019. The Nasdaq is higher by 2 points to 4,750, and the Russell 2000 is down a point to 1,086.

Today’s action has been a yawn, but it was nice to ring the register on our Rambus (RMBS) trade. Our position was stopped out earlier today, so please be sure to check out that update below. I could also have a New Trade ahead of the closing bell this afternoon, so stay locked and loaded in case I take action.

Momentum Options Play List

Closed Momentum Options Trades for 2016: 29-4 (88%). 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 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.

 

Rambus (RMBS, $12.90, down $0.35)

RMBS April 13 calls (RMBS160415C00013000, $0.47, down $0.10)

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

Exit Target: $0.80

Return: 25%

Stop Target: $0.50 (Stop Limit)

Action: The Stop Limit at $0.50 triggered today on the stock’s drop back below $13, and we are now out of the position.

I will keep RMBS on my watch list for a possible re-entry point, but, for now, we are out.

 

American Express (AXP, $59.60, up $0.14)

AXP April 62.50 calls (AXP160415C00062500, $0.60, down $0.03)

Entry Price: $0.60 (3/11/2016)

Exit Target: $1.20

Return: 0%

Stop Target: None

Action: Support is at $58.50-$58 and the 50-day moving average. Near-term resistance is at $60-$62.50, followed by $65 and the 100-day moving average.

 

Mylan (MYL, $47.63, down $0.97)

MYL April 45 puts (MYL160415P00045000, $1.18, up $0.41)

Entry Price: $1.10 (3/10/2016)

Exit Target: $2.20

Return: 7%

Stop Target: None

Action: Resistance is at $49-$49.25. Support is at $47-$46.50.

You can read my original write-up in the March 11 Pre-Market Update.

 

Intel (INTC, $31.48, down $0.28)

INTC April 29 puts (INTC160415P00029000, $0.27, up $0.02)

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

Exit Target: $0.80

Return: -29%

Stop Target: None

Action: Support is at $31.50-$31.25. Short-term resistance is at $32 and the 100-day moving average.

You can view a chart for INTC and read my write-up in the March 7 New Trade Alert.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options