Dear Momentum Options Subscriber,

The bulls powered the major indices to fresh highs and all-time peaks during Monday’s push through upper resistance. Tech made a run past 5,000 before closing slightly below this level, and volatility rose slightly despite the bears’ non-showing.

The Dow advanced 80 points, or 0.4%, to end at 18,226. The blue-chips held positive territory throughout the session following the run to 18,283. The all-time high of 18,351 is less than 1% away from being triggered. Short-term support is at 18,100-18,000.

The S&P 500 gained 7 points, or 0.3%, to finish just above 2,137. The index reached an all-time intraday peak of 2,143 and ended at a new all-time closing high. Fresh resistance is at 2,150-2,175. Support has moved up to 2,130-2,110.

The Nasdaq added 31 points, or 0.6%, to settle at 4,988. Tech tested an intraday high of 5,002 to bring 5,025-5,050 into play. Support has moved up to 4,925-4,900.

The Russell 2000 climbed 12 points, or 1.1%, to close at 1,190. The small-caps were strong throughout the day after opening at 1,179. The move above short-term resistance at 1,185-1,190 and test to 1,192 should get 1,200-1,210 in the mix.

The S&P Volatility Index ($VIX, 13.54, up 0.34) traded down to 13 and came within half of a point of tripping support at 12.50. However, the close above 13.50 and high of 13.67 in the final minutes of trading were warnings signs from the bears that they are targeting the 15 level again.

From desk to press, futures look like this: Dow (+76); S&P 500 (+11); Nasdaq 100 (+27); Russell (+7).

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 8:00 a.m. EST.

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

 

Achillion Pharmaceuticals (ACHN, $9.21, up $0.07)

ACHN August 10 calls (ACHN160819C00010000, $0.64, up $0.19)

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

Exit Target: $0.90-$1.35

Return: 42%

Stop Target: $0.50 (Stop Limit)

Action: Set a Stop Limit at $0.50 to protect profits.

Volume was a huge yesterday, with over 3,100 contracts traded, as ACHN shares tested a high of $9.32. 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.

 

Cisco Systems (CSCO, $29.43, up $0.17)

CSCO August 30 calls (CSCO160819C00030000, $0.58, up $0.07)

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

Exit Target: $1.25

Return: -6%

Stop Target: None

Action: Shares kissed a fresh 52-week peak of $29.70 on Monday, with the call options testing $0.69.

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

 

Green Dot (GDOT, $23.84, up $0.11)

GDOT August 25 calls (GDOT160819C00025000, $0.80, down $0.11)

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

Exit Target: $1.60

Return: 0%

Stop Target: None

Action: Resistance is at $24-$24.50. A blue-sky breakout could get shares pushing $25-$26. Support is at $23.50-$23.

 

Energous (WATT, $12.74, up $0.48)

WATT August 12.50 calls (WATT160819C00012500, $1.45, up $0.11)

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

Exit Target: $3.15

Return: -8%

Stop Target: $0.75

Action: Resistance is at $13. Yesterday’s peak reached $13.25. Support has moved up to $12.

 

Morgan Stanley (MS, $26.46, up $0.09)

MS August 28 calls (MS160819C00028000, $0.38, flat)

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

Exit Target: $1.50

Return: -52%

Stop Target: None

Action: Resistance is at $26.50-$26.75. Support is at $26-$25.75.

 

Viavi Solutions (VIAV, $6.88, up $0.13)

VIAV September 7 calls (VIAV160916C00007000, $0.36, up $0.07)

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

Exit Target: $1.10

Return: -35%

Stop Target: None

Action: Monday’s push to $6.89 fell shy of near-term resistance at $7. Support is at $6.65-$6.60.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options