Dear Momentum Options Subscriber,

The Dow was the latest index to break out to fresh all-time peaks following this morning’s run to 18,363. The other major indices are also showing strength, but volatility is slightly elevated as we wind down the final hours of trading.

There are a few story-stocks to mention today, starting with Sage Therapeutics (SAGE, $47.18, up $13.63). Shares are up a whopping 40% after Wall Street learned more about the company’s Phase-2 clinical drug trial for the treatment of severe postpartum depression.

The interesting aspect of this potential drug, named SAGE-547, is that it is also being tested as a treatment for rare seizure disorders. Like all drug companies, it’s important to have a developing pipeline and drugs in the market that are making money. Sage Therapeutics doesn’t have any winners yet, but the potential for this drug to be huge is there.

Elsewhere, shares of Alcoa (AA, $10.69, up $0.55) are up 5% after the company posted a solid quarterly report following Monday’s close. The company reported earnings of $0.15 a share on revenue of $5.3 billion. The suits-and-ties were expecting a profit of $0.10 a share on revenue of $5.2 billion.

The Dow is currently adding 133 points to 18,360, while the S&P 500 is higher by 17 points to 2,154. The Nasdaq is advancing 38 points to 5,027, and the Russell 2000 is gaining 18 points to 1,208.

I have updated our current trades below, so let’s go check the tape.

Momentum Options Play List

Closed Momentum Options Trades for 2016: 55-18 (75%). 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 1:55 p.m. EST.

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

 

Cisco Systems (CSCO, $29.57, up $0.14)

CSCO August 30 calls (CSCO160819C00030000, $0.62, up $0.04)

Entry Price: $0.62 (7/11/2016)

Exit Target: $1.25

Return: 0%

Stop Target: None

Action: Resistance is at $29.75-$30. Support is at $29.25-$29.

 

Achillion Pharmaceuticals (ACHN, $9.21, flat)

ACHN August 10 calls (ACHN160819C00010000, $0.56, down $0.08)

Entry Price: $0.45 (7/8/2016)

Exit Target: $0.90-$1.35

Return: 24%

Stop Target: $0.50 (Stop Limit)

Action: Near-term resistance is at $9.25-$9.50, with a move above the latter likely leading to $10 or higher. Support is at $9-$8.75.

 

Green Dot (GDOT, $24.00, up $0.16)

GDOT August 25 calls (GDOT160819C00025000, $0.90, up $0.11)

Entry Price: $0.80 (7/7/2016)

Exit Target: $1.60

Return: 13%

Stop Target: None

Action: Resistance is at $24-$24.50. Support is at $23.50-$23.

 

Energous (WATT, $12.93, up $0.19)

WATT August 12.50 calls (WATT160819C00012500, $1.48, up $0.03)

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

Exit Target: $3.15

Return: -6%

Stop Target: $0.75

Action: Resistance is at $13. Support is at $12.

 

Morgan Stanley (MS, $27.31, up $0.91)

MS August 28 calls (MS160819C00028000, $0.61, up $0.23)

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

Exit Target: $1.50

Return: -23%

Stop Target: None

Action: Fresh resistance is at $27.50. Support is at $26.50-$26.

 

Viavi Solutions (VIAV, $7.02, up $0.14)

VIAV September 7 calls (VIAV160916C00007000, $0.39, up $0.03)

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

Exit Target: $1.10

Return: -29%

Stop Target: None

Action: A close above $7 today would be bullish. Support is at $6.65-$6.60.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options