Dear Momentum Options Subscriber,

The bulls continue to push higher highs, and the “fluff” targets I listed previously for the Dow and S&P 500 are firmly in play. I have already started my weekend homework, as I believe that this week’s action could determine how long the current rally will last.

My early guess is that greener pastures could be seen into August, providing fresh support levels hold on any major pullbacks. Next week, I will discuss all of the moving parts, my predictions for the market and my chart work for the indices that I first profiled in late February.

The close today will be important, as the bulls need to hold the majority of their gains ahead of tomorrow’s July option expiration. Historically, the Dow has struggled over the past 15 years on this day, finishing lower nine times, with especially heavy losses in 2002 (-4.6%) and 2010 (-2.5%). I doubt any potential pullback will be of this magnitude, however, and I’m expecting tech and the small-caps to pick up the slack if the Dow and S&P 500 slip on Friday.

The Dow is currently up 133 points to 18,505, while the S&P 500 is adding 11 points to 2,163. The Nasdaq is higher by 28 points to 5,033, and the Russell 2000 is climbing 6 points to 1,207.

While it has been a busy week, I will have more to talk about regarding our current trades on Monday morning. I have updated our positions in Flextronics International (FLEX) and Cisco Systems (CSCO) below, and I also issued a Profit Alert for our Morgan Stanley (MS) trade earlier this afternoon, so check that out now if you haven’t already.

I could have additional trade updates into the closing bell as well, so stay locked and loaded.

Momentum Options Play List

Closed Momentum Options Trades for 2016: 57-18 (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 12:40 p.m. EST.

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


Flextronics International (FLEX, $13.00, up $0.29)

FLEX August 13 calls (FLEX160819C00013000, $0.47, up $0.15)

Entry Price: $0.44 (7/14/2016)

Exit Target: $1.00

Return: 7%

Stop Target: None

Action: The Exit Target for the trade is at $1.00, but it is not a Limit Order at this time.

Resistance is at $13-$13.25. Support is at $12.75-$12.50.


Cisco Systems (CSCO, $29.77, up $0.02)

CSCO August 30 calls (CSCO160819C00030000, $0.72, flat)

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

Exit Target: $1.25

Return: 16%

Stop Target: $0.65 (Stop Limit)

Action: Set a Stop Limit at $0.65 to protect profits.

Resistance is at $29.75-$30, and a close above the latter would be a very bullish development. Yesterday’s high reached $29.82. Support is at $29.25-$29.


Rambus (RMBS, $12.65, up $0.03)

RMBS August 13 calls (RMBS160819C00013000, $0.47, up $0.01)

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

Exit Target: $1.00

Return: 2%

Stop Target: None

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


Green Dot (GDOT, $24.17, up $0.30)

GDOT August 25 calls (GDOT160819C00025000, $0.95, up $0.12)

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

Exit Target: $1.60

Return: 19%

Stop Target: None

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


Energous (WATT, $12.45, down $0.03)

WATT August 12.50 calls (WATT160819C00012500, $1.15, flat)

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.


Viavi Solutions (VIAV, $7.00, up $0.06)

VIAV September 7 calls (VIAV160916C00007000, $0.36, flat)

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

Exit Target: $1.10

Return: -35%

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