Dear Momentum Options Subscriber,
The bulls battled back on Wednesday to regain their momentum, as they spent the day in positive territory. While the bears took the day off, they haven’t gone away, and they still hold the weekly lead.
The Dow advanced 112 points, or 0.6%, to close at 18,281. The blue-chips traded to a high of 18,315, with resistance at 18,350-18,400 holding. A move above the latter could lead to 18,600. Support has moved up to 18,200-18,100.
The S&P 500 gained 9 points, or 0.4%, to end at 2,159. The index made a run to 2,163 but fell shy of resistance at 2,170-2,175. A move above the latter would be a bullish development. Support remains at 2,150-2,140.
The Nasdaq jumped 26 points, or 0.5%, to settle at 5,316. Tech opened at 5,305 and made a late-day push to 5,330. Lower resistance at 5,325-5,350 was tested but held. Support is at 5,300-5,275.
The Russell 2000 added 8 points, or 0.7%, to finish at 1,248. The small-caps pushed an intraday high of 1,254 to split resistance at 1,250-1,260. A close above the latter should lead to 1,270-1,275. Support is at 1,240-1,235.
The S&P 500 Volatility Index ($VIX, 12.99, down 0.64) traded in negative territory throughout the session, with the low checking in at 12.70. The close below 13.50 was slightly bullish, and support is at 12.50. Resistance is at 14.50-15.
From desk to press, futures look like this: Dow (-29); S&P 500 (-3.5); Nasdaq 100 (-6); Russell (-3).
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 8:00 a.m. EST.
I hereby disclose that I will be participating in the following trade(s).
Kroger (KR, $28.84, down $0.16)
KR November 27.50 puts (KR161118P00027500, $0.48, down $0.07)
Entry Price: $0.50 (10/4/2016)
Exit Target: $1.00
Stop Target: None
Action: Wednesday’s trip to $28.76 represented another 52-week low. Near-term support is at $28.75-$28.50. Resistance is at $29-$29.25.
Halozyme Therapeutics (HALO, $12.31, up $0.45)
HALO November 13 calls (HALO161118C00013000, $0.90, up $0.10)
Entry Price: $1.07 (9/27/2016)
Exit Target: $2.15
Stop Target: $0.55 (Stop Limit)
Action: Yesterday’s peak reached $12.35. Resistance is at $12.25-$12.50. Near-term support is at $12.25-$12.
Goodyear Tire & Rubber (GT, $32.66, up $0.43)
GT October 33 calls (GT161021C00033000, $0.65, up $0.19)
Entry Price: $0.75 (9/22/2016)
Exit Target: $1.50
Stop Target: $0.30 (Stop Limit)
Action: Wednesday’s high tapped $32.98. Resistance is at $32.75-$33. Support is at $32.25-$32.
Viavi Solutions (VIAV, $7.38, up $0.13)
VIAV December 8 calls (VIAV161216C00008000, $0.22, flat)
Entry Price: $0.51 (8/19/2016)
Exit Target: $1.05
Stop Target: $0.15 (Stop Limit)
Action: Shares traded up to $7.46 yesterday. Resistance is at $7.45-$7.50 and the 50-day moving average. Support is at $7.25-$7.20.
Editor and Chief Options Strategist