Dear Momentum Options Subscriber,

Futures were mixed throughout the night, but they turned positive ahead of this morning’s open. The bulls did well and pushed higher highs on better-than-expected economic news, but I warned that the bears like to show up on the day of July option expiration.

Financial stocks are pulling back following another dose of earnings this morning. Citi (C, $43.99, down $0.46) topped estimates by $0.14 after reporting a profit of $1.24 a share versus the forecast for $1.10 a share. Revenues of $17.5 billion also came in higher than expectations for $17.47 billion.

Wells Fargo (WFC, $47.49, down $1.45) matched estimates for earnings of $1.01 a share. However, revenue of $22.16 billion came in slightly below estimates for $22.17 billion.

The Dow is currently down 15 points to 18,491, while the S&P 500 is lower by 5 points to 2,158. The Nasdaq is falling 10 points to 5,023, and the Russell 2000 is off by half of a point to 1,201.

I have updated the parameters of our latest trade in MGM Resorts International (MGM) as well as our other current positions below. There is still another half of trading to go, and I will be watching the action into the closing bell. If you don’t hear from me again, however, have a great and safe weekend.

Momentum Options Play List

Closed Momentum Options Trades for 2016: 58-18 (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 1:25 p.m. EST.

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

 

MGM Resorts International (MGM, $23.47, up $0.18)

MGM August 24 calls (MGM160819C00024000, $0.75, up $0.07)

Entry Price: $0.74 (7/15/2016)

Exit Target: $1.50

Return: 1%

Stop Target: None

Action: The Exit Target for the trade is at $1.50, but it is not a Limit Order at this time.

Near-term resistance is at $23.75-$24. A close above the latter would be a bullish signal. Support is at $23.25-$23.

 

Flextronics International (FLEX, $12.91, down $0.05)

FLEX August 13 calls (FLEX160819C00013000, $0.42, down $0.05)

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

Exit Target: $1.00

Return: -5%

Stop Target: None

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

 

Rambus (RMBS, $12.59, down $0.03)

RMBS August 13 calls (RMBS160819C00013000, $0.45, down $0.02)

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

Exit Target: $1.00

Return: -2%

Stop Target: None

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

 

Green Dot (GDOT, $23.88, down $0.25)

GDOT August 25 calls (GDOT160819C00025000, $0.85, down $0.10)

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

Exit Target: $1.60

Return: 6%

Stop Target: None

Action: Support is at $23.50-$23. Near-term resistance is at $24.25-$24.50.

 

Energous (WATT, $11.95, down $0.16)

WATT August 12.50 calls (WATT160819C00012500, $1.00, down $0.05)

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

Exit Target: $3.15

Return: -36%

Stop Target: $0.75

Action: Support is at $12.25-$12. Resistance is at $12.50-$12.75.

 

Viavi Solutions (VIAV, $7.05, up $0.05)

VIAV September 7 calls (VIAV160916C00007000, $0.37, down $0.05)

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

Exit Target: $1.10

Return: -33%

Stop Target: None

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

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options