Dear Momentum Options Subscriber,
The market has traded on both sides of the ledger during the first half of the action and ahead of the Fed’s two-day meeting that starts today. The zombies will be sleeping through the get-together, however, as the upcoming presidential election is just a week away. There is no scheduled press conference afterwards, so risk may be limited.
Given that scenario, an interest-rate hike in December could be in the cards, but the market will likely have made its next major move by then. The market will also be digesting another jobs report on Friday, along with the continued flood of third-quarter earnings for the rest of the week.
The Dow is currently off 43 points to 18,098, while the S&P 500 is down 8 points to 2,118. The Nasdaq is lower by 18 points to 5,170, and the Russell 2000 is sliding 7 points to 1,184.
I issued a New Trade Alert on Microsoft (MSFT) earlier this afternoon, and that alert is reiterated below. I could also have another recommendation ahead of the closing bell, so stay locked and loaded.
Momentum Options Play List
Closed Momentum Options Trades for 2016: 77-31 (71%). 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 12:15 p.m. EST.
I hereby disclose that I will be participating in the following trade(s).
Microsoft (MSFT, $59.85, down $0.07)
Buy to open the MSFT December 57.50 puts (MSFT161216P00057500) for a maximum price of $1.00.
Action: I like these put options at current levels, and you can use a Limit Order up to $1.00 to get the best fills.
These are the monthly options that expire on Dec. 16. I will provide the parameters of the trade in tomorrow’s Pre-Market Update.
You can read my previous comments on MSFT in the Oct. 31 Mid-Market Update.
Lattice Semiconductor (LSCC, $6.33, up $0.26)
LSCC December 7.50 calls (LSCC161216C00007500, $0.30, up $0.08)
Entry Price: $0.30 (10/12/2016)
Exit Target: $0.60-$0.90
Stop Target: None
Action: Resistance is at $6.25-$6.30 and the 50-day moving average. Support is at $6.05-$6 and the 100-day moving average.
The company is scheduled to announce earnings next Monday, and I will have a preview ready later in the week.
Viavi Solutions (VIAV, $7.01, down $0.12)
VIAV December 8 calls (VIAV161216C00008000, $0.10, down $0.01)
Entry Price: $0.51 (8/19/2016)
Exit Target: $1.05
Stop Target: $0.05 (Stop Limit)
Action: Support is at $7-$6.90, but there is risk to $6.75 and the 200-day moving average on a move below the latter. Resistance is at $7.20-$7.25 and the 100-day moving average.
Earnings are due out after the closing bell. I apologize for any confusion, as the time of the release wasn’t officially confirmed. Wall Street is expecting a $0.07 profit on revenue north of $208 million.
Editor and Chief Options Strategist