Dear Momentum Options Subscriber,

I mentioned in Monday morning’s Pre-Market Update that shares of Deutsche Bank (DB, $13.99, down $0.11) may be ripe for the picking. The stock came into the week just south of $13 after bottoming at $12.50 on Wednesday and Thursday of last week. I also mentioned that there could be a rebound to the mid-teens worth playing, and I wish I had gotten us into the call options I profiled.

The DB August 15 calls (DB160819C00015000, $0.55, down $0.05) came into Monday’s open at $0.35, while the DB October 13 calls (DB161021C00013000, $2.20, down $0.10) closed last Friday at $1.65.

Both of the aforementioned call options have posted nice returns since then, and I would start locking in at least partial profits if you took a flier on these trades. I didn’t officially recommend these call options for the portfolio because we were already long Morgan Stanley (MS) call options, and the trade was down just over 50% at the time.

The market has traded within a relatively tight range today and on both sides of the ledger as Wall Street prepares for earnings from the financials over the next two days. The Dow is currently up 22 points to 18,370, while the S&P 500 is higher by a fraction of a point to 2,151. The Nasdaq is down 8 points to 5,014, and the Russell 2000 is off 4 points to 1,201.

I have updated the parameters of our latest trade in Rambus (RMBS) below, and I also have a Profit Alert for our position in Achillion Pharmaceuticals (ACHN), which we were stopped out of today.

Momentum Options Play List

Closed Momentum Options Trades for 2016: 56-18 (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 2:40 p.m. EST.

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

 

Achillion Pharmaceuticals (ACHN, $9.07, down $0.17)

ACHN August 10 calls (ACHN160819C00010000, $0.40, down $0.19)

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

Exit Target: $0.90-$1.35

Return: 10%

Stop Target: $0.50 (Stop Limit)

Action: The Stop Limit at $0.50 was triggered on today’s backtest to $9, and we are now out of the position.

 

Rambus (RMBS, $12.66, up $0.25)

RMBS August 13 calls (RMBS160819C00013000, $0.48, up $0.13)

Entry Price: $0.46 (7/13/2016)

Exit Target: $1.00

Return: 4%

Stop Target: None

Action: The Exit Target is at $1.00, but do not make it a Limit Order at this time.

Short-term resistance is at $12.75-$13. Support is at $12.25-$12.

 

Cisco Systems (CSCO, $29.78, up $0.16)

CSCO August 30 calls (CSCO160819C00030000, $0.69, up $0.08)

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

Exit Target: $1.25

Return: 11%

Stop Target: None

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

 

Green Dot (GDOT, $23.92, up $0.04)

GDOT August 25 calls (GDOT160819C00025000, $0.90, flat)

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, $12.43, down $0.53)

WATT August 12.50 calls (WATT160819C00012500, $1.15, down $0.43)

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

Exit Target: $3.15

Return: -27%

Stop Target: $0.75

Action: Support is at $12.50-$12.25. Resistance is at $13-$13.25.

 

Morgan Stanley (MS, $27.15, down $0.22)

MS August 28 calls (MS160819C00028000, $0.48, down $0.25)

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

Exit Target: $1.50

Return: -39%

Stop Target: None

Action: Support is at $27-$26.75. Resistance is at $27.50.

 

Viavi Solutions (VIAV, $6.95, down $0.05)

VIAV September 7 calls (VIAV160916C00007000, $0.38, down $0.04)

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

Exit Target: $1.10

Return: -31%

Stop Target: None

Action: Support is at $6.65-$6.60. Resistance is at $7.15-$7.25.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options