Dear Momentum Options Subscriber,

This week’s see-saw action has continued through the first half of trading today, with the bulls rebounding from yesterday’s losses and pushing higher highs this morning. I mentioned previously that September option expiration day is this Friday and, with the FOMC meeting next week, traders should stay buckled up, as the whipsaw action will likely continue into next week.

We might see a trend start to develop by then, however, and that would allow us to add more positions to the portfolio. In the meantime, it is a stock-picker’s market, which is why both fundamental and technical analysis are so important when initiating new positions.

During this kind of wacky action, it also makes sense to hold both bullish and bearish positions on stocks that appear the strongest or weakest. In other words, stocks pushing fresh 52-week peaks or setting 52-week lows.

The Dow is currently gaining 68 points to 18,135, while the S&P 500 is advancing 9 points to 2,136. The Nasdaq is adding 41 points to 5,196, and the Russell 2000 is higher by 3 points to 1,215.

I mentioned that I would be busy writing and preparing possible trades this week, so stay near your email inboxes into the close in case I decide to take action. You can also sign up to receive SMS text message alerts by clicking here if you haven’t done so already.

Momentum Options Play List

Closed Momentum Options Trades for 2016: 69-24 (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 12:30 p.m. EST.

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


Chicago Bridge & Iron (CBI, $27.94, down $0.49)

CBI October 27.50 puts (CBI161021P00027500, $1.16, up $0.16)

Entry Price: $1.11 (9/14/2016)

Exit Target: $2.25

Return: 5%

Stop Target: None

Action: The Exit Target for the trade is at $2.25, but it is not a Limit Order at this time. There is no Stop Target at this time.

The CBI chart from this morning’s alert showed a six-month timeframe, but I also wanted to show the five-year weekly chart to show why I have a near-term price target of $25-$24. Today’s 52-week low has reached $27.81.

A close below $27.50 should get $26.50-$26 in play. Resistance is at $28-$28.25.


Xilinx (XLNX, $53.29, up $0.66)

XLNX October 57.50 calls (XLNX161021C00057500, $0.71, up $0.06)

Entry Price: $0.71 (9/12/2016)

Exit Target: $1.45

Return: 0%

Stop Target: None

Action: Resistance is at $53-$53.25. A close above the latter would be bullish. Support is at $53-$52.50.

You can read my detailed write-up in yesterday’s Mid-Market Update.


Kroger (KR, $31.06, up $0.11)

KR October 30 puts (KR161021P00030000, $0.55, down $0.02)

Entry Price: $0.78 (9/7/2016)

Exit Target: $1.60 (Limit Order on first half)

Return: -29%

Stop Target: None

Action: Resistance is at $31.25-$31.50. Support is at $30.75-$30.50.


Vuzix (VUZI, $8.71, up $0.01)

VUZI October 10 calls (VUZI161021C00010000, $0.50, up $0.04)

Entry Price: $0.68 (9/7/2016)

Exit Target: $1.40

Return: -26%

Stop Target: $0.25 (Stop Limit)

Action: Support is at $8.75-$8.50. Resistance is at $9-$9.25.


Viavi Solutions (VIAV, $7.59, up $0.08)

VIAV December 8 calls (VIAV161216C00008000, $0.39, up $0.02)

Entry Price: $0.51 (8/19/2016)

Exit Target: $1.05

Return: -24%

Stop Target: None

Action: Resistance is at $7.75-$8. Support is at $7.50-$7.25 and the 50-day moving average.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options