Dear Momentum Options Subscriber,
While third-quarter earnings season doesn’t officially start until next week, there are a few major earnings announcements scheduled to be released over the next several days. The companies reporting this week have different fiscal years, but their results could be a primer for things to come.
On Tuesday, Darden Restaurants (DRI) will announce its quarterly results ahead of the opening bell, while Micron Technology (MU) will confess after the close. Analysts are looking for a loss of $0.12 a share on revenue of $3.15 billion for MU, while DRI is expected to post a profit $0.82 a share on revenue of $1.72 billion.
Constellation Brands (STZ), Monsanto (MON) and Yum Brands (YUM) are scheduled to announce their earnings on Wednesday. STZ is forecasted to earn $1.65 a share on revenue of $1.96 billion. YUM earnings are pegged at $1.10 a share on sales of $3.46 billion, while MON is expected to lose $0.02 a share on revenue of $2.38 billion.
The rest of the week will be light on announcements, but there could be an opportunity for an earnings trade in one of the aforementioned names, so stay tuned.
Today’s action has been sluggish so far, and the bears are controlling the tempo. Fresh support is holding on the pullback, but the bulls will need to show a little strength into the close to keep last week’s momentum.
The Dow is currently down 68 points to 18,239, while the S&P 500 is off 9 points to 2,158. The Nasdaq is declining 20 points to 5,291, and the Russell 2000 is lower by 8 points to 1,243.
I have updated our current trades below, and I will likely hold off on taking a New Trade today. However, if the action gets better or worse, I could have a new recommendation. If you don’t hear from me by 3:30 p.m. EST, however, I will chat with you again tomorrow morning.
Momentum Options Play List
Closed Momentum Options Trades for 2016: 74-25 (75%). 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 1:55 p.m. EST.
I hereby disclose that I will be participating in the following trade(s).
Halozyme Therapeutics (HALO, $12.10, up $0.02)
HALO November 13 calls (HALO161118C00013000, $0.81, down $0.29)
Entry Price: $1.07 (9/27/2016)
Exit Target: $2.15
Stop Target: $0.55 (Stop Limit)
Action: Resistance is at $12.25-$12.50. Near-term support is at $12-$11.75.
You can read my detailed write-up on HALO in last Wednesday’s Mid-Market Update.
Goodyear Tire & Rubber (GT, $32.45, up $0.15)
GT October 33 calls (GT161021C00033000, $0.52, down $0.05)
Entry Price: $0.75 (9/22/2016)
Exit Target: $1.50
Stop Target: $0.30 (Stop Limit)
Action: Resistance is at $32.50-$32.75. A close above the latter would be a bullish development for a possible push to $34-$35. Support is trying to move up to $32.25-$32.
You can read a more detailed write-up on GT in last Monday’s Mid-Market Update.
Viavi Solutions (VIAV, $7.34, down $0.05)
VIAV December 8 calls (VIAV161216C00008000, $0.20, flat)
Entry Price: $0.51 (8/19/2016)
Exit Target: $1.05
Stop Target: $0.15 (Stop Limit)
Action: Support is at $7.25-$7.20. Resistance is at $7.45-$7.50 and the 50-day moving average.
Editor and Chief Options Strategist