Dear Momentum Options Subscriber,

The bulls have now recovered roughly 80% of the Brexit losses, and they will be looking to get back to even ahead of the upcoming July 4 U.S. market holiday. The bears are looking to get back into the game as well following three days of heavy losses for their side, and today’s close will likely set up the action heading into next week.

The Dow added 235 points, or 1.3%, to finish at 17,929. The blue-chips held positive territory throughout the session after opening at 17,712. The high of 17,930 and close above 17,900 was a bullish signal that gets 18,000-18,100 in play today. Support has moved up to 17,700-17,600.

The S&P 500 jumped 28 points, or 1.4%, to settle at 2,098. The index held support at 2,075-2,070 following a test to the latter shortly after the open. The surge to its session high into the final bell fell just shy of upper resistance at 2,100. A close above this level should get 2,120-2,125 back in the mix.

The Nasdaq zoomed 63 points higher, or 1.3%, to close at 4,842. Tech slipped 5 points to 4,774 within the first hour of the action, with fresh support at 4,775-4,750 holding. The run to 4,843 looked bullish, with a close above 4,850 leading to additional resistance at 4,900. I would like to see 4,800 hold on a pullback ahead of the three-day weekend.

The Russell 2000 gained 20 points, or 1.8%, to end at 1,151. The small-caps slipped 3 points to 1,128 during the morning scramble, with support at 1,125-1,120 easily holding. The second-half push to 1,152 and close above 1,150 look sweet for further gains past 1,160. The bulls need to hold 1,140 on weakness.

The S&P 500 Volatility Index ($VIX, 15.63, down 1.01) tested a low of 15.29 on Thursday, with the bulls falling just shy of support at 15. A move below this level would be bullish for next week and increase the chances of 13.50-12.50 coming back into play. Resistance is at 16.50-17.50.

From desk to press, futures look like this: Dow (-5); S&P 500 (-1); Nasdaq 100 (-1); Russell (+1.5).

Momentum Options Play List

Closed Momentum Options Trades for 2016: 52-18 (74%). 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 8:00 a.m. EST.

I hereby disclose that I will be participating in the following trade(s).

 

Skyworks Solutions (SWKS, $63.28, up $1.55)

SWKS August 65 calls (SWKS160819C00065000, $3.00, up $0.50)

Entry Price: $2.50 (6/28/2016)

Exit Target: $3.75

Return: 20%

Stop Target: $1.25, raise to $2.60 (Stop Limit)

Action: Raise the Stop Limit from $1.25 to $2.60 to start protecting profits.

Near-term resistance is at $62-$64. Thursday’s high reached $63.31. Short-term support is at $60-$58.

 

Cisco Systems (CSCO, $28.69, up $0.43)

CSCO August 29 calls (CSCO160819C00029000, $0.63, up $0.14)

Entry Price: $0.55 (6/30/2016)

Exit Target: $1.10

Return: 15%

Stop Target: None

Action: If shares trade past $30.10, technically, by mid-August, the call options will be worth at least $1.10 for a double from our entry price. Resistance is at $28.75-$29. Support is at $28.25-$28.

 

Energous (WATT, $12.92, up $0.54)

WATT August 12.50 calls (WATT160819C00012500, $1.80, up $0.20)

Entry Price: $1.57 (6/28/2016)

Exit Target: $3.15

Return: 15%

Stop Target: $0.75

Action: Yesterday’s high tapped $13.30, with the calls trading up to $2.00. Resistance is at $12.75-$13. Support is at $11-$10 if $12 fails to hold.

 

Morgan Stanley (MS, $25.98, up $0.75)

MS August 28 calls (MS160819C00028000, $0.36, up $0.08)

Entry Price: $0.79 (6/23/2016)

Exit Target: $1.50

Return: -54%

Stop Target: None

Action: Resistance is at $26-$26.25. Support has moved up to $25.25-$25.

 

Viavi Solutions (VIAV, $6.63, up $0.06)

VIAV September 7 calls (VIAV160916C00007000, $0.32, up $0.04)

Entry Price: $0.55 (6/23/2016)

Exit Target: $1.10

Return: -42%

Stop Target: None

Action: Near-term resistance is at $6.75-$7. Support is at $6.50-$6.40.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options

P.S.Celebrate July 4th with Huge Savings! My goal is to help you build your wealth. That’s why you can now save up to 60% on your Momentum Options subscription. Some of the best trading opportunities of the year are dead ahead, and I’m expecting us to capture plenty of profits. Accept your huge savings now!