Dear Momentum Options Subscriber,

The bulls are working to secure a three-session win streak today, and they are also trying to end a two-week losing streak that began at the start of October. Overall, trading has been choppy, as Wall Street is awaiting October options expiration tomorrow.

As far as economic news, initial jobless claims rose by 13,000 to 260,000, topping expectations for a reading of 250,000 first-time claims. Elsewhere, the Philadelphia Federal Reserve’s monthly index on regional manufacturing came in at 9.7 for the month, topping estimates for a reading of 5. Finally, existing home sales rose by 3.2% to a rate of 5.47 million in September, which was also slightly better than expected.

Although today’s action has been somewhat erratic, if support holds on a weak pullback into the close, it would be a victory for the bulls.

The Dow is currently down 13 points to 18,189, while the S&P 500 is off 2 points to 2,142. The Nasdaq is slipping a point to 5,244, and the Russell 2000 is lower by 3 points to 1,219.

I have updated our current positions below, so let’s go check in on the action.

Momentum Options Play List

Closed Momentum Options Trades for 2016: 74-28 (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 3:05 p.m. EST.

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

 

E*Trade Financial (ETFC, $28.28, down $0.20)

ETFC November 29 calls (ETFC161118C00029000, $0.66, down $0.14)

Entry Price: $0.90 (10/17/2016)

Exit Target: $1.80

Return: -27%

Stop Target: None

Action: Support is at $28-$27.75. Resistance is at $28.50-$28.75. Earnings are due out after the closing bell today.

While we will be holding the trade through the close today and into earnings, if you do not feel comfortable holding through earnings this afternoon, feel free to exit the trade at your discretion.

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

 

PowerShares QQQ ETF (QQQ, $117.76, down $0.09)

QQQ November 120 calls (QQQ161118C00120000, $0.81, down $0.09)

Entry Price: $0.99 (10/13/2016)

Exit Target: $2.00

Return: -18%

Stop Target: None

Action: Support has moved up to $117.50-$117. Resistance is at $118 and the 50-day moving average, followed by $119-$120.

 

Lattice Semiconductor (LSCC, $6.49, down $0.02)

LSCC December 7.50 calls (LSCC161216C00007500, $0.30, down $0.05)

Entry Price: $0.30 (10/12/2016)

Exit Target: $0.60-$0.90

Return: 0%

Stop Target: None

Action: Support is at $6.25. Resistance is at $6.75.

 

Apple (AAPL, $117.18, up $0.06)

AAPL November 125 calls (AAPL161118C00125000, $0.66, down $0.08)

Entry Price: $1.10 (10/11/2016)

Exit Target: $2.20

Return: -40%

Stop Target: None

Action: Support is at $117-$116.50. There is risk to $114-$113.75 on a close below the latter. Resistance is at $118-$118.25.

 

Finisar (FNSR, $29.71, up $0.06)

FNSR November 31 calls (FNSR161118C00031000, $0.61, down $0.09)

Entry Price: $1.28 (10/10/2016)

Exit Target: $2.60

Return: -52%

Stop Target: $0.30 (Stop Limit)

Action: Support is at $29-$28.75. Resistance is at $29.50-$30.

 

Viavi Solutions (VIAV, $7.31, down $0.04)

VIAV December 8 calls (VIAV161216C00008000, $0.16, flat)

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

Exit Target: $1.05

Return: -69%

Stop Target: $0.05 (Stop Limit)

Action: Resistance is at $7.45-$7.50 and the 50-day moving average. Support is at $7.25-$7.15 and the 100-day moving average.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options