Dear Momentum Options Subscriber,
Futures were forecasting a lackluster open this morning, but the action felt bullish as I watched the pre-market noise. Today’s push towards the market’s upper resistance levels is only a stepping stone, as there are a number of newsworthy events scattered throughout the week.
Second-quarter earnings season will start to slow dramatically in September, but the anxiety and pressure of third-quarter earnings will start up in early October. I talked about the ongoing trading range that is pushing higher highs in this morning’s Pre-Market Update, although it would be hard to imagine this carrying on for another month.
If it does, however, a breakout to record highs could coincide with third-quarter earnings season, or a breakdown could occur once the results start coming in.
There are a few notable companies reporting numbers this week, including Palo Alto Networks (PANW) on Tuesday and Five Below (FIVE) on Wednesday.
Thursday will be a busy day, as Campbell Soup (CPB), Joy Global (JOY), Lands’ End (LE), Lululemon Athletica (LULU), Smith & Wesson (SWHC), Vera Bradley (VRA) and Verifone Systems (PAY) are scheduled to confess their quarterly results.
I will be researching a few of the aforementioned stocks for possible earnings trades, so stay tuned.
The Dow is currently gaining 111 points to 18,507, while the S&P 500 is higher by 12 points to 2,181. The Nasdaq is adding 21 points to 5,240, and the Russell 2000 is up 9 points to 1,247.
I have a partial Profit Alert for our position in Energous (WATT) listed below, and I’m adjusting the parameters of our Vuzix (VUZI) trade, so let’s go check the action.
I’m still hopeful that I will be able to get us into a New Trade ahead of the closing bell, but we don’t need to force the action given today’s gains in our current positions.
Momentum Options Play List
Closed Momentum Options Trades for 2016: 63-23 (73%). 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 2:00 p.m. EST.
I hereby disclose that I will be participating in the following trade(s).
Energous (WATT, $18.07, up $1.34)
WATT November 17.50 calls (WATT161118C00017500, $2.50, up $0.60)
Entry Price: $1.15 (8/22/2016)
Exit Target: $2.50-$3.00 (Limit Order on first half at $2.50)
Stop Target: $1.45 (Stop Limit)
Action: The Limit Order to close the first half of the WATT November 17.50 calls at $2.50 has triggered for an initial gain of 117%.
Shares have traded to a 52-week high of $18.57 today. Resistance is at $18.50-$19. Support has moved up to $16.50-$16.
Vuzix (VUZI, $8.47, up $0.62)
VUZI October 7.50 calls (VUZI161021C00007500, $1.48, up $0.33)
Entry Price: $0.95 (8/23/2016)
Exit Target: $1.90
Stop Target: $0.97, raise to $1.15 (Stop Limit)
Action: Raise the Stop Limit from $0.97 to $1.15. Today’s low on the calls has been $1.20.
Resistance has moved up to $8.50-$8.75. Support is at $8-$7.50.
Nucor (NUE, $49.40, up $0.71)
NUE October 52.50 calls (NUE161021C00052500, $0.63, up $0.07)
Entry Price: $0.63 (8/25/2016)
Exit Target: $1.30
Stop Target: None
Action: Resistance is at $49-$50 and the 100-day moving average. Support is at $48.50-$48.
Viavi Solutions (VIAV, $7.84, up $0.07)
VIAV December 8 calls (VIAV161216C00008000, $0.46, flat)
Entry Price: $0.51 (8/19/2016)
Exit Target: $1.05
Stop Target: None
Action: Resistance is at $7.85-$8. Support is at $7.75-$7.50.
Bank of America (BAC, $15.96, up $0.17)
BAC September 15 calls (BAC160916C00015000, $1.00, up $0.15)
Entry Price: $0.50 (8/8/2016)
Exit Target: $1.25 (closed half at $0.63 on 8/25/2016)
Stop Target: $0.70 (Stop Limit)
Action: Resistance is at $16-$16.25. Support is at $15.75-$15.50.
Rambus (RMBS, $13.92, up $0.01)
RMBS September 14 calls (RMBS160916C00014000, $0.28, flat)
Entry Price: $0.40 (8/1/2016)
Exit Target: $0.80
Stop Target: None
Action: Resistance is at $14. A close above this level could lead to a run at $14.25-$14.50. Support is at $13.75-$13.50.
Editor and Chief Options Strategist