Dear Momentum Options Subscriber,
Shares of Energous (WATT, $8.83, up $0.09) and bullish WATT options have a high risk/reward profile, as the company generated no revenue last quarter and is still losing money.
In its latest earnings release, the company reported a loss of $0.61 a share versus estimates for a loss of $0.49 a share. The company is three years young, but investors must see something on the horizon considering the $140 million market cap.
Energous is developing a completely new technology platform that could revolutionize how we charge our mobile gadgets. I mentioned previously that this wireless charging technology is called “WattUp,” and it is protected by over 250 patent filings.
WattUp-integrated devices will give users of smartphones, computers, tablets and other peripheral portable electronic devices the ability to charge them from up to 15 feet away — wirelessly. It is a “two-part system” integrated by a tiny Energous receiver chip that allows devices to be recharged wirelessly.
With Apple (AAPL) and other smartphone-makers constantly looking for the next big thing, WattUp technology could get users like me to finally upgrade. While I do enjoy the smartphone technology, I have seen a major reason to upgrade my phone in recent years, as I still have an iPhone 4.
Obviously, I’m an Apple fanatic, but, more importantly, I’m a technology fan, and a potential partnership could be exciting. Apple has been going “thinner” with its latest smartphones, and Energous’ tiny receiver chip won’t add any thickness to smart devices.
Here comes the interesting part. In the earnings update from February, the company’s CEO said that WattUp technology would be ready for sale later this year or early next year. Hopefully it will be ready by September of this year rather than next year.
Rumor has it that Apple could possibly release its iPhone 7 by September. The iPhone 6s and iPhone 6s Plus launched in September of 2015, so this would make sense. However, as long as the phone is ready by Christmas, all should be well, as it would fall within the calendar year. This trade hinges on when Apple announces the expected release of its latest iPhone, as it would solidify a partnership and huge incoming revenues for Energous.
On that note, Apple has sent out invitations for an event taking place on March 21 at Apple’s headquarters. While it would be nice to get an official iPhone 7 announcement, don’t be surprised if the “iPhone SE” is introduced to bridge the gap. The latest model may or may not include the wireless charging technology.
Apple could also possibly introduce the iPad Air 3, a new Apple Watch and straps, and maybe a new Mac. These devices could also include Energous’ technology, so there are other products we can bank on to make the news.
I will be upgrading to the iPhone 7 once it becomes available if Energous’ wireless technology is included. Of course, I would also like to see a smartphone that is waterproof and un-hackable as well, but I will settle for “cord-cutting” for now.
As far as the technicals, the short-term chart below shows how shares have traded since going public in March of 2014. Near-term resistance is at $9.50-$10, and a move above the latter would likely lead to $12. The all-time high for the stock is just south of $16.
Today’s surge to and past resistance for the market is looking good. Wall Street has brought out the traditional bagpipes, and the Dow will close back in the green for the year if current levels hold.
The Dow is currently jumping 142 points to 17,468, while the S&P 500 is popping a 12-pack to 2,039. The Nasdaq is higher by 8 points to 4,772, and the Russell 2000 is up 9 points to 1,083.
I have updated our current trades below, so let’s go check the tape. I also issued a partial Trade Alert earlier this afternoon for our position in Intel (INTC), so be sure to check that out now if you haven’t already.
Momentum Options Play List
Closed Momentum Options Trades for 2016: 30-4 (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 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.
Sony (SNE, $26.07, up $0.57)
SNE April 26 calls (SNE160415C00026000, $0.89, up $0.29)
Entry Price: $0.72 (3/17/2016)
Exit Target: $1.45
Stop Target: None
Action: Shares are making a run past their 200-day moving average, and I would like to see a close above $26 today. Support is at $25.50-$25.
Energous (WATT, $8.83, up $0.09)
WATT May 10 calls (WATT160520C00010000, $1.65, up $0.15)
Entry Price: $0.80 (3/15/2016)
Exit Target: $1.60-$2.40
Stop Target: $1.05 (Stop Limit)
Action: Resistance is at $9-$9.50 on continued momentum. Support is at $8.50-$8.25.
American Express (AXP, $60.38, up $0.68)
AXP April 62.50 calls (AXP160415C00062500, $0.50, up $0.05)
Entry Price: $0.60 (3/11/2016)
Exit Target: $1.20
Stop Target: None
Action: Near-term resistance is at $60-$62.50. Support is at $58.50-$58 and the 50-day moving average.
You can read my original write-up and view a chart in the March 14 Pre-Market Update.
Intel (INTC, $32.12, up $0.43)
INTC April 29 puts (INTC160415P00029000, $0.17, down $0.07)
Entry Price: $0.38 (3/7/2016)
Exit Target: $0.80 (Closed first half at $0.17 on 3/17/16.)
Stop Target: None
Action: Resistance is at $32 and the 100-day moving average. Support is at $31.75-$31.50.
You can view a chart for INTC and read my write-up in the March 7 New Trade Alert.
Editor and Chief Options Strategist