Dear Momentum Options Subscriber,

Futures were showing a slippery open this morning, with near-term support coming into play. While this is giving the talking heads comfort in knowing that the market doesn’t always go straight up, they can hang their hats on finally calling for a pullback, providing the losses hold into the close.

Consumers were in a spending mood last week, as a record $3.34 billion was spent on Black Friday, with online sales up 20% from last year. This could mean lower sales for Cyber Monday today, but I wouldn’t rule out another record being broken when the results come in tomorrow. Analysts are expecting sales north of $3.4 billion.

This could be bullish for the retail sector and the market in general if record-breaking spending numbers continue. While I’m not sure how the rest of the action will play out into today’s close and on Tuesday, the rest of the week could see a return to higher highs.

The last trading day of November has been positive nearly 70% of the time over the past decade, and tech has been just as strong on the first trading day of December. These facts don’t necessarily mean that record highs are in store this week, but I like the odds.

The Dow is currently down 43 points to 19,109, while the S&P 500 is slipping 6 points to 2,207. The Nasdaq is off 12 points to 5,386, and the Russell 2000 is lower by 11 points to 1,336.

While I was hoping to add a New Trade today, I have been busy looking at fresh ideas to find the best candidates. I often say that I don’t like to force the action no matter what my views are on the current and near-term market environment. We have the rest of the week to add to the portfolio, so I want to be a little patient.

In the meantime, let’s take a look at our current plays. I’m adjusting the Stop Limit on our Tower Semiconductor (TSEM) trade, and I’m also recommending that we take action on our Lattice Semiconductor (LSCC) trade this afternoon, so be sure to check that out as well.

Momentum Options Play List

Closed Momentum Options Trades for 2016: 80-33 (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 1:45 p.m. EST.

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


Lattice Semiconductor (LSCC, $7.05, down $0.20)

LSCC December 7.50 calls (LSCC161216C00007500, $0.02, down $0.03)

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

Exit Target: $0.60 (Limit Order)

Return: -93%

Stop Target: None

Action: Sell to close the LSCC December 7.50 calls at current levels.

There is currently no bid for these calls, but let’s leave our sell orders in place and wait for them to fill when a bid re-emerges.

Today’s break below $7 was a bearish development and an event that will likely keep $7.50 out of reach in a couple of weeks. This was a very disappointing outcome given that the company is getting bought out north of $8.


Tower Semiconductor (TSEM, $18.01, down $0.26)

TSEM January 19 calls (TSEM170120C00019000, $0.70, flat)

Entry Price: $0.50 (11/16/2016)

Exit Target: $1.00

Return: 40%

Stop Target: $0.45, lower to $0.35 (Stop Limit)

Action: Lower the Stop Limit from $0.45 to $0.35. There hasn’t been any activity in these options today, but I want to give the trade a little more wiggle room.

Support is at $18. Resistance has moved down to $18.25-$18.50.


Chicago Bridge & Iron (CBI, $32.81, down $0.87)

CBI January 35 calls (CBI170120C00035000, $0.88, down $0.30)

Entry Price: $1.25 (11/25/2016)

Exit Target: $2.50

Return: -30%

Stop Target: None

Action: Fresh support is at $32.75-$32.50. Resistance is at $33-$33.50.


T-Mobile (TMUS, $54.83, up $0.24)

TMUS December 56 calls (TMUS161216C00056000, $0.70, down $0.13)

Entry Price: $0.75 (11/25/2016)

Exit Target: $1.50

Return: -6%

Stop Target: None

Action: Resistance is at $55, with blue-sky territory to $57.50-$60 on continued strength. Support is at $53-$52.


Imax (IMAX, $32.30, down $2.20)

IMAX January 36 calls (IMAX170120C00036000, $0.50, down $0.45)

Entry Price: $0.90 (11/23/2016)

Exit Target: $1.80

Return: -44%

Stop Target: None

Action: Backup support at $32.25-$32 is in play on today’s 6% pullback. Resistance is at $32.75-$33.

You can read my previous comments on IMAX in this morning’s Pre-Market Update.


Microsoft (MSFT, $60.86, up $0.33)

MSFT December 62.50 calls (MSFT161216C00062500, $0.33, up $0.07)

Entry Price: $0.45 (11/22/2016)

Exit Target: $1.00

Return: -27%

Stop Target: None

Action: Resistance is at $60.75-$61. Short-term support is at $60.50-$60.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options