Dear Momentum Options Subscriber,

The bulls made a strong statement once again on Wednesday following another run to record highs. The recent rally is the strongest in three years, and it is becoming more hated each day by those on Wall Street that have missed the train. While worries over a pullback persist, I have mentioned that July could stay strong all month long.

The Dow jumped 36 points, or 0.2%, to close at 18,595. The blue-chips opened higher at 18,582 before falling nearly 4 points to 18,555 shortly afterwards. The slight pullback held rising support at 18,600-18,500, but there is risk to 18,400-18,350 on a close below the latter. The push to 18,622 intraday set another all-time high. My near-term fluff targets remain at 18,800-19,000.

The S&P 500 advanced 9 points, or 0.4%, to end at 2,173. The index held positive territory throughout the session, with the bulls pushing a record high of 2,175. The move into resistance opens up blue-sky territory to 2,200. Support has moved up to 2,060, followed by 2,050-2,040.

The Nasdaq soared 53 points, or 1.1%, to finish at 5,089. Tech opened above the 5,050 level, which is now fresh support, to reach a peak of 5,098. There is risk to 5,025-5,000 on a move back below this level. Resistance at 5,100 held strong, and a close above this level should get 5,150-5,200 in the mix.

The Russell 2000 added 9 points, or 0.8%, to settle at 1,209. The small-caps tested a low of 1,198 on the open, with support at 1,200-1,190 easily holding. The rebound to 1,212 pushed upper resistance at 1,210-1,215. A close above the latter should get 1,225-1,230 in play.

The S&P 500 Volatility Index ($VIX, 11.77, down 0.20) stayed relatively flat throughout the session, with the bulls testing 11.40 and support at 11.50 intraday. Continued closes below this level should get 10-9 in the picture, which would signal a near-term market top. Resistance is at 12.50-13.50.

From desk to press, futures look like this: Dow (-19); S&P 500 (-1); Nasdaq 100 (+4); Russell (-1.5).

Momentum Options Play List

Closed Momentum Options Trades for 2016: 59-18 (77%). 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).

 

Flextronics International (FLEX, $13.25, up $0.33)

FLEX August 13 calls (FLEX160819C00013000, $0.63, up $0.17)

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

Exit Target: $1.00

Return: 43%

Stop Target: $0.50 (Stop Limit)

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

Shares traded to a fresh 52-week high of $13.37 yesterday, and I have talked about a possible run to $14-$15. Resistance is at $13-$13.50-$13.75. Support is at $13-$12.75.

 

MGM Resorts International (MGM, $23.50, up $0.35)

MGM August 24 calls (MGM160819C00024000, $0.67, up $0.12)

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

Exit Target: $1.50

Return: -9%

Stop Target: None

Action: Near-term resistance is at $23.75-$24. Support is at $23.25-$23 and the 50-day moving average.

 

Green Dot (GDOT, $24.06, up $0.20)

GDOT August 25 calls (GDOT160819C00025000, $0.80, flat)

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

Exit Target: $1.60

Return: 0%

Stop Target: None

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

 

Energous (WATT, $11.87, up $0.02)

WATT August 12.50 calls (WATT160819C00012500, $0.75, down $0.05)

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

Exit Target: $3.15

Return: -52%

Stop Target: $0.50 (Stop Limit)

Action: Support is at $11.75-$11.50. Resistance is at $12-$12.25.

 

Viavi Solutions (VIAV, $6.99, up $0.04)

VIAV September 7 calls (VIAV160916C00007000, $0.37, down $0.03)

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 $6.80-$6.75.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options