Dear Momentum Options Subscriber,
Despite another choppy open, the bulls have pushed higher highs today and are on track for the best week in two years. The market quickly went from being oversold coming into the week to being stretched at current levels heading into the weekend.
Earnings season is still in play, although most companies have reported better-than-expected results. The rebound in the financial stocks has been and will be a major catalyst going forward, and I will cover more about the sector on Monday morning.
The gap-opens have been hard to trade this week, and call premiums have become expensive. Put options look cheap, but they could get cheaper if the market continues to rally. The good news is that we will be getting great set-ups on the gap higher if there is a backtest in the coming weeks. If not, we can look for sector-leading stocks to play a possible continued run to record highs.
The Dow is currently higher by 14 points to 18,822, while the S&P 500 is down 5 points to 2,161. The Nasdaq is up 16 points to 5,225, and the Russell 2000 is adding 14 points to 1,278.
I have updated our current trades below ahead of the weekend and, while I would love to take a New Trade today, it is probably best to wait until Monday. There is a biotech stock I’m currently doing research on that looks intriguing, so there is a chance that I could take a trade ahead of the close. However, if you don’t hear from me, have a great and safe weekend.
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 1:55 p.m. EST.
I hereby disclose that I will be participating in the following trade(s).
Starbucks (SBUX, $53.63, up $0.06)
SBUX January 47.50 puts (SBUX170120P00047500, $0.41, down $0.01)
Entry Price: $0.95 (11/3/2016)
Exit Target: $1.90
Stop Target: None
Action: Support is at $53.50-$53. Resistance is at $54-$54.50.
Microsoft (MSFT, $58.81, up $0.11)
MSFT December 57.50 puts (MSFT161216P00057500, $0.98, down $0.10)
Entry Price: $0.86 (11/1/2016)
Exit Target: $1.75 (Closed first half at $1.09 on 11/10/16)
Stop Target: $0.90 (Stop Limit)
Action: Resistance is at $58.75-$59. Support is at $58.
Lattice Semiconductor (LSCC, $7.71, up $0.05)
LSCC December 7.50 calls (LSCC161216C00007500, $0.30, flat)
Entry Price: $0.30 (10/12/2016)
Exit Target: $0.70 (Limit Order)
Stop Target: None
Action: Support is at $7.50. Resistance is at $7.75-$8.
Viavi Solutions (VIAV, $7.84, up $0.09)
VIAV December 8 calls (VIAV161216C00008000, $0.20, up $0.01)
Entry Price: $0.51 (8/19/2016)
Exit Target: $1.05
Stop Target: $0.05 (Stop Limit)
Action: Resistance is at $8. Support is at $7.60-$7.50.
Editor and Chief Options Strategist