MomentumOptions.com Pre-Market Update for 12/13/2016

Blue-Chips Hold Court/ Profit Alert (ETFC)

8:00am (EST)

The market held its pattern of a mixed session throughout Monday’s action from open to close in an otherwise lackluster start to the week. The blue-chips continued their run towards record highs but the other major indexes failed to follow suit. There will likely be continued choppiness ahead of the Fed decision on interest rates due out Wednesday afternoon.

The Dow gained 39 points, or 0.2%, to finish at 19,796. The blue-chips traded to a fresh all-time peak of 19,824 during the first half of action to push lower resistance at 19,800-20,000. The backtest to 19,747 intraday easily held support at 19,600-19,500.

The S&P 500 slipped 2 points, or 0.1%, to close just below 2,257. The index made a run to another record high of 2,264 shortly after the open with resistance and my near-term fluff targets of 2,275-2,300 holding. Fresh support is at 2,250 followed by 2,240-2,235.

The Nasdaq fell 32 points, or 0.6%, to settle at 5,412. Tech traded in negative territory throughout the session with the bears pushing a low of 5,394. Upper support at 5,400-5,350 held but the close below 5,425 needs to be respected. Resistance is at 5,450-5,475 on closes back above 5,425.

The Russell 2000 sank 15 points, or 1.1%, to end at 1,373. The small-caps made a half-point trip into positive territory shortly after the open but stalled at 1,388 – and a half. Short-term resistance at 1,395-1,400 held before the fade to 1,370. Shaky support at 1,380-1,375 failed to hold and opens up risk to 1,360-1,350. A close below the latter would be a bearish development.

The S&P 500 Volatility Index ($VIX, 12.64, up 0.89) added 7% and traded higher throughout Monday to close back above the 12.50 level. Resistance at 12.50-13.50 held with a move above the latter being a red flag. Support remains at 11.50.

We locked-in profits on our 82nd winning trade for 2016. The pullback in ETFC tripped the Stop Limit and I have made raised the Stop Limits on RMBS and CBI to further protect profits.

From desk to press, futures look like this: Dow (+11); S&P 500 (-1); Nasdaq 100 (+2); Russell (+2).
Momentum Options Play List

Closed Momentum Options Trades for 2016: 82-34 (70%). 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.

 

Viavi Solutions (VIAV, $8.48, down $0.05)

VIAV March 9 calls (VIAV170317C00009000, $0.38, down $0.02)

Entry Price: $0.37 (12/8/2016)
Exit Target: $1.00
Return: 3%
Stop Target: None

Action: Shares kissed $8.21 before rebounding to $8.62.
Resistance is at $8.75-$9. A close above the latter should lead towards a run towards $9.50. Short-term support is at $8.40 followed by $8.25-$8.

 

E*Trade Financial (ETFC, $34.93, down $0.71)

ETFC January 35 calls (ETFC170120C00035000, $1.35, down $0.40)

Entry Price: $1.20 (11/30/2016)
Exit Target: $2.40
Return: 25%
Stop Target: $1.50 (Stop Limit)

Action:The Stop Limit at $1.50 tripped on yesterday’s drop below $35 to $34.79.

If shares hold $34 going forward, I could come back to these call options or possible February calls.

 

PowerShares QQQ Trust (QQQ, $118.96, down $0.54)

QQQ January 122 calls (QQQ170120C00122000, $0.70, down $0.20)

Entry Price: $0.90 (11/30/2016)
Exit Target: $1.80
Return: -22%
Stop Target: None

Action: The QQQ’s traded down to $118.47 yesterday. Support is at $118.50-$118. Resistance is at $119.75-$120.

 

Rambus (RMBS, $14.21, down $0.06)

RMBS February 14 calls (RMBS170217C00014000, $0.90, down $0.05)

Entry Price: $0.53 (11/30/2016)
Exit Target: $1.10
Return: 70%
Stop Target: 75 cents, raise to 80 cents (Stop Limit)

Action: Raise the Stop Limit from 75 cents to 80 cents.

Monday’s low tapped $13.99. Near-term support is at $14-$13.75. Resistance is at $14.50 and the 52-week high.

 

TiVo (TIVO, $21.60, down $0.05)

TIVO January 22.50 calls (TIVO170120C00022500, $0.55, flat)

Entry Price: $0.33 (11/30/2016)
Exit Target: $0.70
Return: 67%
Stop Target: None

Action: Support is at $21.25-$21. Resistance is at $22-$22.50.

 

Chicago Bridge & Iron (CBI, $36.21, up $0.71)

CBI January 35 calls (CBI170120C00035000, $2.20, up $0.40)

Entry Price: $1.25 (11/25/2016)
Exit Target: $2.50, raise to $3 (closed half at $2.20 on 12/12/2016)
Return: 76%
Stop Target: $1.50, raise to $1.75 (Stop Limit)

Action: Raise the Exit Target from $2.50 to $3 on the other half of the trade. Raise the Stop Limit from $1.50 to $1.75.

We closed half the trade at $2.20 after shares reached a peak of $36.49 yesterday. The calls traded to a high of $2.35.

Fresh resistance is at $36.50-$37. Support is at $35-$34.75.

 

Imax (IMAX,$32.10, down $0.45)

IMAX January 36 calls (IMAX170120C00036000, $0.20, down $0.10)

Entry Price: $0.90 (11/23/2016)
Exit Target: $1.80
Return: -78%
Stop Target: None

Action: Support is at $31.50-$31.25. Resistance is at $32.50. A golden cross has formed with the 50-day moving average crossing above the 200-day moving average last week. This is usually a bullish indicator but shares need to clear $33 to get the short to possibly start covering again.

You can read my previous comments on IMAX from the 11/28/16 Pre-Market update.

 

Microsoft (MSFT, $62.17, up $0.20)

MSFT December 62.50 calls (MSFT161216C00062500, $0.35, up $0.03)

Entry Price: $0.45 (11/22/2016)
Exit Target: 75 cents (Limit Order)
Return: -22%
Stop Target: None

Action: Resistance is at $62-$62.50. Yesterday ‘s rebound run reached $62.30 following a morning dip to $61.72. Support is at $61.50-$61.25.

 

Lattice Semiconductor (LSCC, $7.07, up $0.05)

LSCC December 7.50 calls (LSCC161216C00007500, $0.05, flat)

Entry Price: $0.30 (10/12/2016)
Exit Target: 60 cents (Limit Order)
Return: -83%
Stop Target: None

Action: Support is at $6.75 and the 50-day moving average. Resistance is at $7-$7.25.

You can read my previous comments on LSCC and the buyout offer of $8.30 a share from the 11/4/16 Pre-Market update.

 

Rick Rouse
MomentumOptions.com