Dear Momentum Options Subscriber,

The market has been slightly weak for most of today’s session, but the bulls are trying to hold their gains for the week.

The Dow went into Monday’s open at 18,543 and has traded to a low of 18,568 today, while the S&P 500 closed last Friday at 2,182 and has tested a low of 2,180. The Nasdaq and Russell came into the week at 5,221 and 1,231, respectively, and both indices have traded below these levels today.

This morning’s retail sales data put a damper on today’s action, as the report came in flat for July versus the forecast for an increase of 0.4%. However, the sector has performed well this week despite the disappointing data. I will have an update on Monday about some of the retail stocks reporting earnings next week that look interesting.

The Dow is currently down 38 points to 18,575, while the S&P 500 is slipping 2 points to 2,184.  The Nasdaq is off 2 points to 5,225, and the Russell 2000 is higher by a point to 1,230.

We are in cruise control for the rest of the day, as I will likely stand pat with our current trades. I have already started my weekend research, and I’ve mentioned that the market could be in store for a continued August rally.

While the next few weeks could look similar with slight gains, the bulls might have a chance to carry their momentum into September given the current environment. Of course, this will depend on key levels of support holding today and next week.

I will be watching the action into the close, but, if you don’t hear from me again, have a great and safe weekend.

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 12:05 p.m. EST.

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

 

MGM Resorts International (MGM, $24.56, down $0.33)

MGM September 25 calls (MGM160916C00025000, $0.60, down $0.10)

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

Exit Target: $1.40

Return: -14%

Stop Target: None

Action: Support is at $24.50-$24.25. Resistance is at $24.75-$25.

 

Bank of America (BAC, $14.81, down $0.07)

BAC September 15 calls (BAC160916C00015000, $0.29, down $0.05)

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

Exit Target: $1.00

Return: -42%

Stop Target: None

Action: Support is at $15-$14.75, followed by $14.50 and the 200-day moving average. Resistance is at $15.25-$15.50.

 

Rambus (RMBS, $13.64, up $0.08)

RMBS September 14 calls (RMBS160916C00014000, $0.28, flat)

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

Exit Target: $0.80

Return: -30%

Stop Target: None

Action: Support is at $13.50-$13.25. Resistance is at $13.75-$14.

 

Vuzix (VUZI, $7.86, up $0.11)

VUZI September 10 calls (VUZI160916C00010000, $0.35, up $0.02)

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

Exit Target: $2.00

Return: -64%

Stop Target: None

Action: Fresh resistance is at $7.75-$8. Support has moved up to $7.50-$7.25.

 

Viavi Solutions (VIAV, $7.21, down $0.12)

VIAV September 7 calls (VIAV160916C00007000, $0.42, down $0.13)

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

Exit Target: $1.10

Return: -23%

Stop Target: None

Action: Support is at $7, with $6.90-$6.85 and the 50-day moving average serving as backup. Resistance is at $7.25-$7.50.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options