Dear Momentum Options Subscriber,
With many of the slick-talking pros taking it easy and going on early vacations this week, the bulls aren’t giving the market a reason for a pullback, as the technical outlook continues to improve.
Of course, I always like to say that the bulls prefer to take the stairs higher, while the bears tend to use the elevator to the downside. However, in Monday’s Pre-Market Update, I mentioned the levels we need to watch before deciding to possibly go “short.”
Today’s action to continued record highs officially has my near-term and February fluff targets in play. The Dow is up 44 points to 19,000, while the S&P 500 is adding a point to 2,198. The Nasdaq is gaining 7 points to 5,376, and the Russell 2000 is higher by 5 points to 1,327.
I have a Profit Alert for our Array BioPharma (ARRY) position and a Trade Alert for our Starbucks (SBUX) position listed below. I have also updated the parameters of our latest trade in Microsoft (MSFT) from this morning, so let’s take a look.
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Closed Momentum Options Trades for 2016: 79-33 (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 2:35 p.m. EST.
I hereby disclose that I will be participating in the following trade(s).
Array BioPharma (ARRY, $7.67, down $0.37)
ARRY January 7 calls (ARRY170120C00007000, $1.20, down $0.25)
Entry Price: $0.78 (11/14/2016)
Exit Target: $2.50-$3.00
Stop Target: $1.15 (Stop Limit)
Action: The Stop Limit at $1.15 has triggered today on the pullback to $7.60, and we are now out of the position.
Starbucks (SBUX, $56.90, up $0.80)
SBUX January 47.50 puts (SBUX170120P00047500, $0.13, down $0.03)
Entry Price: $0.95 (11/3/2016)
Exit Target: $1.90
Stop Target: $0.12 (Stop Limit)
Action: The Stop Limit at $0.12 is within a penny of triggering, so I’m recommending that we cut losses and sell to close the trade at the current bid.
Resistance is at $56.25-$56.50. Support is at $55.75-$55.50.
Microsoft (MSFT, $61.06, up $0.20)
MSFT December 62.50 calls (MSFT161216C00062500, $0.48, up $0.05)
Entry Price: $0.45 (11/22/2016)
Exit Target: $1.00
Stop Target: None
Action: The Exit Target is at $1.00, but it is not a Limit Order at this time. There is no Stop Limit at this time.
There was heavy buying in the MSFT December 63 calls yesterday, as over 15,000 contracts traded. I wanted to get ahead of the crowd, which is why I went with these $62.50 strike call options. Resistance is at $61.25-$61.50. Short-term support is at $60.50-$60.
Tower Semiconductor (TSEM, $18.39, up $0.16)
TSEM January 19 calls (TSEM170120C00019000, $0.65, up $0.10)
Entry Price: $0.50 (11/16/2016)
Exit Target: $1.00
Stop Target: $0.39 (Stop Limit)
Action: Resistance is at $18.25-$18.50. Support is at $18-$17.75.
Apple (AAPL, $111.73, flat)
AAPL January 115 calls (AAPL170120C00115000, $2.01, down $0.03)
Entry Price: $1.24 (11/15/2016)
Exit Target: $2.50
Stop Target: $1.75 (Stop Limit)
Action: Resistance is at $112-$112.50. A close above the latter would be bullish for a possible run at $114-$115. Support is at $110, followed by $108-$107.75 and the 100-day moving average.
Lattice Semiconductor (LSCC, $7.36, down $0.16)
LSCC December 7.50 calls (LSCC161216C00007500, $0.11, flat)
Entry Price: $0.30 (10/12/2016)
Exit Target: $0.60 (Limit Order)
Stop Target: None
Action: Support is at $7.50-$7.25. Resistance is at $7.75-$8.
Editor and Chief Options Strategist