Dear Momentum Options Subscriber,
Thursday’s session was choppy once again, and the major indices ended mixed after trading within another tight range. The Dow has been setting lower lows, while tech has been pushing higher highs. Today’s action could provide more of the same, but a higher close ahead of the weekend would be bullish for next week.
The Dow dropped 15 points, or 0.1%, to end at 18,456. The blue-chips spent the majority of the session in negative territory and tapped a low of 18,368. Support at 18,400-18,350 held for the fourth-straight session, but the lower low is concerning. The late-day recovery off of the lows into positive territory reached a high of 18,483, but the index fell shy of resistance at 18,500-18,600.
The S&P 500 gained 3 points, or 0.2%, to finish at 2,170. The index tested a low of 2,159 for the second-straight session, but it held support at 2,160 for the 11th-straight session. There is risk to 2,150-2,140 on a close below this level. Resistance at 2,170-2,175 held following the late-day run to 2,172.
The Nasdaq advanced 15 points, or 0.3%, to settle at 5,154. Tech kissed 5,130 on the open, with rising support at 5,125-5,100 holding for the second-straight day. The close above upper resistance at 5,150 was a bullish sign that should get 5,175-5,200 in the mix.
The Russell 2000 slipped by over a point, or 0.1%, to close at 1,217. The small-caps traded in a tight 5-point range throughout the session, with the low checking in at 1,214. Support at 1,210-1,200 has been solid, but a close below the latter would be a bearish development. Resistance remains at 1,225-1,230.
The S&P 500 Volatility Index ($VIX, 12.67, down 0.16) traded to a high of 12.90, with the hulls holding resistance at 13.50. The bears held support at 12.50 following the late-day low of 12.59.
From desk to press, futures look like this: Dow (-33); S&P 500 (-3); Nasdaq 100 (+0.5); Russell (-1.5).
Momentum Options Play List
Closed Momentum Options Trades for 2016: 61-19 (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 8:00 a.m. EST.
I hereby disclose that I will be participating in the following trade(s).
Vuzix (VUZI, $8.04, down $0.08)
VUZI September 10 calls (VUZI160916C00010000, $0.75, down $0.03)
Entry Price: $0.97 (7/27/2016)
Exit Target: $2.00
Stop Target: None
Action: Support is at $8-$7.50, with risk to $7 on a close below the latter. Resistance is at $8.25-$8.50.
Green Dot (GDOT, $23.98, down $0.08)
GDOT August 25 calls (GDOT160819C00025000, $0.65, down $0.10)
Entry Price: $0.80 (7/7/2016)
Exit Target: $1.60
Stop Target: None
Action: Support is at $23.75-$23.50. Resistance is at $24-$24.25.
Energous (WATT, $12.47, up $0.02)
WATT August 12.50 calls (WATT160819C00012500, $0.80, up $0.05)
Entry Price: $1.57 (6/28/2016)
Exit Target: $3.15
Stop Target: $0.50 (Stop Limit)
Action: Resistance is at $12.50-$12.75. Support is at $12.25-$12.
Viavi Solutions (VIAV, $7.08, down $0.06)
VIAV September 7 calls (VIAV160916C00007000, $0.41, down $0.04)
Entry Price: $0.55 (6/23/2016)
Exit Target: $1.10
Stop Target: None
Action: Support is at $7, with $6.80-$6.75 and the 50-day moving average serving as backup. Resistance is at $7.25.
Editor and Chief Options Strategist