Dear Momentum Options Subscriber,
The market has been trading in a tight range for much of today’s session as investors await Janet Yellen’s speech this afternoon. The assumption was that the markets would be quiet ahead of the Fed Chair’s upcoming comments on interest rates and the economy, and that has played out like spades.
The bulls appear to have a little more momentum going into the expected fireworks and latest spin news, but Yellen is walking a tight rope as she tries to please all market participants while not upsetting the apple cart.
Currently, the Dow is down 31 points to 17,504, while the S&P 500 is lower by a point to 2,035. The Nasdaq is higher by 21 points to 4,788, and the Russell 2000 is up 5 points to 1,085.
I could have a New Trade once the dust settles later this afternoon depending on the action, so stay tuned. I’m bullish on Oracle (ORCL, $40.63, up $0.01), but I’m currently doing the math to find the best call option trade for us. In the meantime, let’s go check on our current positions.
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 firstname.lastname@example.org, 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!
Momentum Options Play List
Closed Momentum Options Trades for 2016: 34-6 (85%). 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 12:05 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, $13.72, up $0.34)
RMBS May 14 calls (RMBS160520C00014000, $0.54, up $0.07)
Entry Price: $0.45 (3/28/2016)
Exit Target: $1.10
Stop Target: None
Action: Near-term resistance is at $13.75-$14. Support is at $13.50-$13.25.
You can read my full write-up on RMBS in this morning’s Pre-Market Update.
Nucor (NUE, $46.85, up $0.36)
NUE April 48 calls (NUE160415C00048000, $0.48, up $0.03)
Entry Price: $0.55 (3/17/2016)
Exit Target: $0.80 (Limit Order on first half)
Stop Target: None
Action: Resistance is at $47-$47.25. A move above the latter should get multi-month highs in play. The 52-week peak is at $50.70. Support is at $46, with backup help at $45.50-$45.
You can read my extended write-up on NUE in the March 28 Pre-Market Update.
Editor and Chief Options Strategist