Dear Momentum Options Subscriber,
With the major indices pulling back to support, the bears are looking to get back-to-back wins heading into the second half of today’s session. Volatility has also stayed elevated, but the bulls are trying to hold upper resistance.
I have been doing some heavy research throughout the morning and, of the 50 or so charts I have scanned, I have done the fundamental and technical analysis on at least a dozen of them. I mentioned previously that I didn’t want to open new trades with September expiration dates, as the option chain expires mid-month in a little over four weeks from now, so I have been focusing on October, November and December expiration call and put options.
My watch list is loaded with ideas for both call and put options at the moment, but it is a little too early to get aggressive, as we are still winding down our remaining trades. By going with the later-dated options, it will allow more time for the continued trading range to play out.
The Dow is currently down 22 points to 18,529, while the S&P 500 is lower by 2 points to 2,175. The Nasdaq is falling 7 points to 5,219, and the Russell 2000 is giving back 7 points to 1,223.
I have a Profit Alert for one of our current trades this afternoon, as shares of Viavi Solutions (VIAV) fell prey to the overall market weakness shortly after the open. Let’s go take a look.
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Closed Momentum Options Trades for 2016: 61-22 (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 1:05 p.m. EST.
I hereby disclose that I will be participating in the following trade(s).
Viavi Solutions (VIAV, $7.67, up $0.07)
VIAV September 7 calls (VIAV160916C00007000, $0.67, down $0.03)
Entry Price: $0.55 (6/23/2016)
Exit Target: $1.10
Stop Target: $0.62 (Stop Limit)
Action: The Stop Limit at $0.62 was triggered this morning following the stock’s dip to $7.52 shortly after the open, and we are now out of the position with a gain of close to 13%.
Our gains were trimmed, but we locked in profits on a long-running position to free up additional room for possible new trades.
MGM Resorts International (MGM, $24.35, down $0.14)
MGM September 25 calls (MGM160916C00025000, $0.44, down $0.06)
Entry Price: $0.70 (8/8/2016)
Exit Target: $1.40
Stop Target: None
Action: Support is at $24.50-$24.25. Resistance is at $24.75-$25.
Bank of America (BAC, $15.18, up $0.01)
BAC September 15 calls (BAC160916C00015000, $0.45, up $0.01)
Entry Price: $0.50 (8/8/2016)
Exit Target: $1.00
Stop Target: None
Action: Near-term resistance is at $15.25-$15.50. Support is at $15-$14.75.
Rambus (RMBS, $13.53, down $0.02)
RMBS September 14 calls (RMBS160916C00014000, $0.20, down $0.03)
Entry Price: $0.40 (8/1/2016)
Exit Target: $0.80
Stop Target: None
Action: Support is at $13.50-$13.25. Resistance is at $13.75-$14.
Editor and Chief Options Strategist