Dear Momentum Options Subscriber,
Shares of Zillow (Z, $32.08, up $1.75) are surging today following the company’s $130 million settlement with News Corp’s Move Inc. and the National Association of Realtors. The two-year-long legal battle over trade secrets could have cost the company nearly $2 billion in damages. The fact that the company won’t have to pay the 90%+ difference between these two figures was a huge windfall, and it puts the issue to rest.
I noticed the $1 pop and push past $30 yesterday on no specific news, and I was planning to do the research and chart work on the move this morning. As you can see, shares had been in a tight trading range for over a month, but today’s run to $33.25 should get the 52-week high of $33.62 in play.
While it would have been a risky trade to go in blind, the Z June 30 calls (Z160617C00030000, $2.55, up $1.25) have nearly doubled after opening at $3 and reaching a peak of $3.29.
The Z July 30 calls (Z160715C00030000, $3.20, up $1.15) have soared over 55% and have traded to a high of $3.60.
At this point, I don’t want to chase these options, but I’m keeping shares on my watch list along with longer-term, out-of-the-money call options to possibly trade a breakout to fresh 52-week peaks.
As far as the market goes this afternoon, higher highs are in play, but the follow-through needs to hold into the close. The Dow is advancing 65 points to 17,985, while the S&P 500 is up 7 points to 2,116. The Nasdaq is higher by a point to 4,969, and the Russell 2000 is 3 points higher at 1,180.
I’m working on a possible New Trade in Microsoft (MSFT) right now, which I hope to have ready shortly. Stay locked and loaded into the close in case I decide to take action.
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 email@example.com, and I will do my best to address them every Wednesday morning.
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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 12:05 p.m. EST.
I hereby disclose that I will be participating in the following trade(s).
Tailored Brands (TLRD, $15.26, up $0.62)
TLRD July 15 calls (TLRD160715C00015000, $1.35, up $0.05)
Entry Price: $1.17 (6/3/2016)
Exit Target: $2.35
Stop Target: None
Action: Near-term resistance is at $15 and the 100-day moving average. Support has moved up to $14.50-$14.25.
Inovio Pharmaceuticals (INO, $11.23, down $0.10)
INO July 12 calls (INO160715C00012000, $0.60, flat)
Entry Price: $0.80 (6/1/2016)
Exit Target: $1.60
Stop Target: None
Action: Resistance is at $11.75-$12. Support is at $11.50-$11.
PowerShares QQQ ETF (QQQ, $110.43, down $0.03)
QQQ July 112 calls (QQQ160715C00112000, $0.99, down $0.05)
Entry Price: $1.15 (5/31/2016)
Exit Target: $2.30
Stop Target: $0.55 (Stop Limit)
Action: Monday’s high reached $110.75. Resistance is at $111.50-$112. Support is at $108.50-$108.
Editor and Chief Options Strategist