Dear Momentum Stocks Weekly Subscriber,
The first half of Wednesday’s action was slightly choppy despite futures showing a positive open. The bears’ attempt to mount any momentum and make lower lows stalled ahead of Wall Street’s lunch break, as rising support held. The bulls controlled the second half of the action while pushing higher highs, but they continue to struggle with near-term resistance.
The Dow gained 42 points, or 0.2%, to close at 18,096. The blue-chips opened higher before slipping to a low of 18,031 shortly afterwards. Support at 18,000-17,800 easily held before the run to 18,167. Near-term resistance is at 18,200, followed by the all-time high a point above 18,350.
The S&P 500 added nearly 2 points, or 0.1%, to end at 2,102. The index struggled with the 2,100 level, but it did hold 2,090 following the intraday drop to 2,096. Resistance remains at 2,015-2,025.
The Nasdaq climbed 8 points, or 0.2%, to settle at 4,948. Tech traded to a low of 4,928 shortly after the open, with support at 4,925-4,900 now holding for the sixth-straight session. The rebound to 4,969 fell shy of upper resistance at 4,975-5,000.
The Russell 2000 advanced 2 points, or 0.2%, to finish at 1,142. The small-caps mingled in a tight 10-point range following the low of 1,137 during the first half of trading. Support at 1,135 held, with backup help at 1,125-1,120 waiting in the wings. Resistance at 1,150 was tested ahead of the closing bell, and the bulls pushed a high of 1,147.
The S&P 500 Volatility Index ($VIX, 13.28, up 0.04) traded to its lowest level so far in 2016 as it tapped 12.50. This was a big deal, but it was not mentioned by one of the slick-talking pros. The bears pushed a high of 13.50, which is a level that is trying to hold as fresh support. A close above 14.50-15 is now a clear signal for when heightened volatility will return.
From desk to press, futures look like this: Dow (+0); S&P 500 (+2); Nasdaq 100 (+5); Russell (-0.2).
Momentum Stocks Weekly Play List
All prices given in this update are current as of Apr. 20, 2016. I hereby disclose that I will be participating in the following trade(s).
The Momentum Stocks Weekly Closed Trade Track Record is 2-8, for a 20% win rate for 2016 (146-33, or 82% win rate, overall since the start of 2011)
View the entire list of open and closed trades by clicking here.
Lattice Semiconductor (LSCC, $5.74, up $0.03)
Original Entry Price: $6.77 (12/29/2015)
Lowered Price from Selling Options: N/A
Exit Target: $9.00
Return: -15%
Stop Target: $3.50 (Stop Limit)
Action: Sell to close LSCC at the open this morning.
The technical setup still looks bullish, but there is resistance at $5.75-$6. I still believe the trade can get back to even, but I want to make room for faster-moving trades in what could be a very volatile rest of the year.
Planet Fitness (PLNT, $15.65, down $0.19)
Entry Price: $17.85 (9/16/2015)
Lowered Price from Selling Options: N/A
Exit Target: $22.00
Return: -12%
Stop Target: $12.00
Action: Sell to close PLNT at the open this morning.
I like PLNT for the long haul, but closing the position will allow us to reallocate this capital into faster-moving trades.
Support is at $15-$14.75 and the 50- and 100-day moving averages. Resistance is at $15.75-$16.
Rave Restaurant Group (RAVE, $5.16, down $0.09)
Original Entry Price (First Position): $13.92 (7/9/2015)
Lowered Price from Selling Options: N/A
Exit Target: $20.00
Return: -63%
Stop Target: $4.00
Original Entry Price (Second Position): $11.70 (8/17/2015)
Lowered Price from Selling Options: N/A
Exit Target: $13.00+
Return: -56%
Stop Target: $4.00
Action: Sell to close both positions in RAVE at the open this morning.
I love this trade for the next 3-5 years, but this year was spent closing longer-term positions, as I mentioned how the market environment is changing at the expense of stock trading.
Support is at $5.15-$5. Resistance is at $5.25-$5.50.
Trade on!
Rick Rouse
Editor
Momentum Stocks Weekly
