Dear Momentum Options Subscriber,
The bulls continued their thirst for higher highs, with the small-caps leading Thursday’s pack. The financial stocks showed strength again, which put the bears back on defense. Wall Street might be hesitant to go long over the weekend, but my current outlook shows blue-sky territory now continuing into the first week of December.
The Dow gained 35 points, or 0.2%, to close at 18,903. The blue-chips slipped to 18,845 shortly after the open, with support at 18,800-18,700 standing tall. The rebound to 18,904 and close above upper resistance at 18,900 was a bullish signal. A move above 19,000 should get more fund managers to put money to work.
The S&P 500 jumped 10 points, or 0.5%, to finish at 2,187. The index held rising support at 2,175-2,170 on the minor slippage to 2,176 at the start of trading. The run to 2,188 pushed lower resistance at 2,190-2,200, and a close above the latter should get 2,225-2,250 in the mix.
The Nasdaq zoomed 39 points, or 0.7%, to settle at 5,333. Tech kissed a low of 5,288 after the opening bell, with prior support at 5,275-5,250 holding. The close above the 5,300 level and sprint to 5,334 afterwards came within 8 points of the all-time high. There is additional fluff to 5,400 over the near term on continued closes above 5,350.
The Russell 2000 added 7 points, or 0.6%, to settle end at 1,309. The small-caps held positive territory throughout the session, while tapping another intraday high at 1,313. I have talked about blue-sky resistance to 1,315-1,325 this week, and a close into this range would be another green light for higher highs. Support has moved up to 1,300-1,290.
The S&P 500 Volatility Index ($VIX, 13.35, down 0.37) stayed deflated throughout Thursday’s session, with the low checking in at 12.97. The close below 13.50 was pretty, and this is a level that I would like to see hold into the weekend. If not, resistance is at 14.50-15. Support at 12.50-11.50 remains.
While I have already talked about the bullish run continuing for the rest of this month, it would be nice to see another positive Friday close to confirm that cash is still coming into the market.
From desk to press, futures look like this: Dow (-5); S&P 500 (-0.5); Nasdaq 100 (-0.25); Russell (+3).
Momentum Options Play List
Closed Momentum Options Trades for 2016: 78-31 (72%). 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).
Apple (AAPL, $109.95, down $0.04)
AAPL January 115 calls (AAPL170120C00115000, $1.78, down $0.05)
Entry Price: $1.24 (11/15/2016)
Exit Target: $2.50
Stop Target: $1.49, raise to $1.55 (Stop Limit)
Action: Raise the Stop Limit from $1.49 to $1.55. Yesterday’s low tapped $1.56 after shares made a low of $108.83 intraday.
Support is at $109-$108. Resistance is at $110.
Array BioPharma (ARRY, $7.32, up $0.32)
ARRY January 7 calls (ARRY170120C00007000, $1.11, up $0.26)
Entry Price: $0.78 (11/14/2016)
Exit Target: $1.80
Stop Target: $0.85 (Stop Limit)
Action: Set a Stop Limit at $0.85 to protect profits.
Shares reached a fresh 52-week peak of $7.39 yesterday. Fresh resistance is at $7.50, with a close above this level likely leading to $8. Rising support is at $7.20-$7.
Tower Semiconductor (TSEM, $18.16, up $0.66)
TSEM January 19 calls (TSEM170120C00019000, $0.62, up $0.17)
Entry Price: $0.50 (11/16/2016)
Exit Target: $1.00
Stop Target: None
Action: Fresh resistance is at $18.25-$18.50. Support is trying to move up to $18-$17.75.
Starbucks (SBUX, $55.85, up $0.41)
SBUX January 47.50 puts (SBUX170120P00047500, $0.21, down $0.02)
Entry Price: $0.95 (11/3/2016)
Exit Target: $1.90
Stop Target: $0.12 (Stop Limit)
Action: Resistance is at $56. Support is at $55.25-$55.
Lattice Semiconductor (LSCC, $7.50, down $0.19)
LSCC December 7.50 calls (LSCC161216C00007500, $0.26, flat)
Entry Price: $0.30 (10/12/2016)
Exit Target: $0.60 (Limit Order)
Stop Target: None
Action: Support is at $7.50. Resistance is at $7.75-$8. The 52-week peak is at $7.99.
Viavi Solutions (VIAV, $7.89, down $0.04)
VIAV December 8 calls (VIAV161216C00008000, $0.18, down $0.03)
Entry Price: $0.51 (8/19/2016)
Exit Target: $1.05
Stop Target: $0.14 (Stop Limit)
Action: Support is at $7.75-$7.60. Resistance is at $8.
Editor and Chief Options Strategist