Dear Momentum Options Subscriber,

The bulls are looking to hold Friday’s momentum and the gains from the first week of August as they try to start the week with a bullish Monday. Of course, we are only halfway through the session, and the major indices have traded within a tight range on both sides of the ledger. Typical.

The Dow is currently down 19 points to 18,524, while the S&P 500 is lower by 2 points to 2,181.  The Nasdaq is declining 9 points to 5,212, and the Russell 2000 is up a point to 1,232.

We do not have any August-expiration positions open at this time, and we are just starting to build out the portfolio with September call options. There is room to add a few more positions, but I don’t want to get too overloaded, as I would like to be out of all of our current trades within two to three weeks.

The September monthly options have 39 days left before expiration. The August monthly options expire in 11 days, and they are now in what I often call the “danger zone.” My goal is to stay with our current trades through August before turning my focus to bullish or bearish October options.

I have nearly completed my earnings research on Viavi Solutions (VIAV), which is set to release its latest numbers on Thursday. At this time, however, I want to add a few more thoughts to my update, so I am pushing the earnings review back until Tuesday afternoon.

I have been busy setting up our New Trades from this morning, and I have updated the parameters for both of them below. Additionally, I could have another New Trade ahead of the closing bell, so stay locked and loaded.

Momentum Options Play List

Closed Momentum Options Trades for 2016: 61-21 (74%). All trades are dated and time stamped 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 12:55 p.m. EST.

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

 

MGM Resorts International (MGM, $24.58, up $0.13)

MGM September 25 calls (MGM160916C00025000, $0.63, down $0.01)

Entry Price: $0.70 (8/8/2016)

Exit Target: $1.40

Return: -10%

Stop Target: None

Action: Set an Exit Target at $1.40, but do not make it a Limit Order. We are aiming for a double from our entry price with this Exit Target.

Resistance is at $24.75-$25. The 52-week high for MGM is at $25.29. Support is at $24.25-$24, followed by $23.75 and the 50-day moving average.

 

Bank of America (BAC, $15.10, up $0.05)

BAC September 15 calls (BAC160916C00015000, $0.47, up $0.02)

Entry Price: $0.50 (8/8/2016)

Exit Target: $1.00

Return: -6%

Stop Target: None

Action: Set an Exit Target at $1.00, but do not make it a Limit Order. We are looking for a 100% return in this position as well.

Resistance is at $15.25-$15.50. A move above $16 will cause our call options to double from our entry price.

The 52-week high for BAC is at $15.17. Support is at $15-$14.75, followed by $14.50 and the 200-day moving average.

 

Rambus (RMBS, $13.58, down $0.09)

RMBS September 14 calls (RMBS160916C00014000, $0.30, down $0.05)

Entry Price: $0.40 (8/1/2016)

Exit Target: $0.80

Return: -25%

Stop Target: None

Action: Support is at $13.50-$13.25. Resistance is at $13.75-$14. A move above the latter would be bullish.

 

Vuzix (VUZI, $7.45, down $0.02)

VUZI September 10 calls (VUZI160916C00010000, $0.33, down $0.02)

Entry Price: $0.97 (7/27/2016)

Exit Target: $2.00

Return: -66%

Stop Target: None

Action: Support is at $7.25-$7 and the 50-day moving average. Resistance is at $7.50-$7.75.

 

Viavi Solutions (VIAV, $7.26, up $0.01)

VIAV September 7 calls (VIAV160916C00007000, $0.52, up $0.04)

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

Exit Target: $1.10

Return: -5%

Stop Target: None

Action: Shares have traded to another 52-week high of $7.32 today.

Support is at $7, with $6.90-$6.85 and the 50-day moving average serving as backup. Earnings are due out on Thursday.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options