Dear Momentum Options Subscriber,
I got little sleep last night from the time I hit the pillow to the time I woke up, but, as I always say, “A dollar never sleeps,” and it has been a busy morning as well.
Futures were rising throughout the night and were looking strong going into the open, which is why I wanted to get us into a bullish trade on the Russell 2000 small-caps. Unfortunately, our orders for the iShares Russell 2000 ETF (IWM) calls were not filled at or below my Limit Order so far today, so I’m electing to cancel the trade at this point. Please see my update below for further details.
Elsewhere, Inovio Pharmaceuticals (INO) has cleared $11 again, and the 52-week high is at $11.69. There has been no printed news on the stock for me to really ramble about — just the stuff the suits-and-ties are talking about on TV.
However, I’m working on my own report on the stock, as I mentioned that I would have another extended update at some point this week. In the meantime, you can read my previous updates on INO that were originally published in February and April.
Turning to the broader market, the Dow is gaining 217 points to 17,710, while the S&P 500 is adding 26 points to 2,074. The Nasdaq is higher by 84 points to 4,850, and the Russell 2000 is up 20 points to 1,132.
Once again, it has been a busy day full of quick hits, and I remain glued to the market and my monitors. Stay locked and loaded for another possible New Trade later today.
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!
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Momentum Options Play List
Closed Momentum Options Trades for 2016: 45-14 (76%). All trades are dated 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 12:25 p.m. EST.
I hereby disclose that I will be participating in the following trade(s).
iShares Russell 2000 ETF (IWM, $112.72, up $2.06)
IWM June 113 calls (IWM160617C00113000, $1.68, up $0.83)
Action: Cancel any remaining open orders to buy to open the IWM June 113 calls.
As I mentioned above, our Limit Orders at $1.05 did not fill today, so I have voided the trade. I do not want to chase these options at current levels.
Had we been filled at $1.05, I would have set a Limit Order to close the first half of the trade at $1.50 and the second half at $2.00.
Today’s action looks like a “breakout” on the move above its major moving averages. Short-term resistance is at $112-$114, depending on momentum. Support is at $110.75-$110.50, and the 50- and 200-day moving averages seem to be confused. This is one factor that would have made the trade risky, along with the fact that these options expire three weeks from this Friday.
Mylan (MYL, $42.21, up $1.00)
MYL June 35 puts (MYL160520P00035000, $0.10, down $0.10)
Entry Price: $0.60 (5/12/2016)
Exit Target: $1.05 (Limit Order) (sold first half at $0.20 on 5/20/16)
Stop Target: $0.10 (Stop Limit on second half)
Action: The Stop Limit at $0.10 triggered on the second half of the trade, and we are now out of the position.
Inovio Pharmaceuticals (INO, $10.93, up $0.12)
INO August 11 calls (INO160819C00011000, $1.40, up $0.08)
Entry Price: $1.11 (5/20/2016)
Exit Target: $2.25
Stop Target: None
Action: Resistance is at $11-$11.25. A move above $11.50 will likely lead to a blue-sky breakout. The 52-week high is at $11.69. Support is moving up and will try to hold at $10.50-$10.25 going forward.
You can read my extended write-up on INO in the April 4 Pre-Market Update.
You can also read my extended write-up on INO from early February, as I first initiated coverage of the stock when shares were south of $7.
Potash (POT, $16.55, down $0.28)
POT June 15 puts (POT160617P00015000, $0.17, up $0.01)
Entry Price: $0.51 (5/9/2016)
Exit Target: $0.75
Stop Target: $0.10 (Stop Limit)
Action: Upper resistance is at $16.75-$17. Support is at $16.25-$16. The puts have traded down to $0.14 today.
Editor and Chief Options Strategist