MomentumOptions.com Pre-Market Update for 12/14/2016
The bullish momentum continued on Tuesday with Tech leading the charge to another round of record highs. Old Tech names like MSFT, CSCO and INTC showed strong gains and the rebound in some of the other big cap names were bullish signs. Today’s Fed news and a meeting between some of Tech’s most powerful companies and President elect Trump could sway market direction later this afternoon.
The Dow jumped 114 points, or 0.6%, to close at 19,911. The blue-chips traded in positive territory throughout the session while reaching fresh blue-sky territory to 19,953. Upper resistance at 19,800-20,000 is within spitting distance but I don’t want to jinx a move above the latter. Support is trying to move up to 19,700-19,600.
The S&P 500 soared 14 points, or 0.7%, to settle just below 2,271. The index pushed another all-time intraday high of 2,277 with lower resistance and my near-term fluff targets of 2,275-2,300 coming into play. Support remains at 2,250 followed by 2,240-2,235.
The Nasdaq zoomed 51 points, or 1%, to end at 5,463. Tech opened at 5,433 while testing a record high of 5,486 intraday. Resistance at 5,450-5,475 was cleared and the close in the middle was a bullish signal for a possible run past 5,500 over the near-term. Support is at 5,425-5,400 with a move back below 5,350 being a bearish development.
The Russell 2000 added a third-point, or 0.03%, to finish at 1,373. The small-caps opened higher and kissed a high of 1,382 within the first first minutes of trading. Short-term resistance at 1,395-1,400 continues to be a headwind but the close above near-term support at 1,380-1,375 remains bullish. Backup support is at 1,360-1,350 on a close below 1,370.
The S&P 500 Volatility Index ($VIX, 12.72, up 0.08) dipped to a low of 12.34 on the open with support at 11.50 easily holding. The move to 13.42 held upper resistance at 12.50-13.50 with a close above the latter representing a red flag.
I have made adjustments to our current QQQ trade along with raising the Stop Limit on CBI.
From desk to press, futures look like this: Dow (xx); S&P 500 (xx); Nasdaq 100 (xx); Russell (xx).
Momentum Options Play List
Closed Momentum Options Trades for 2016: 83-34 (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.
Viavi Solutions (VIAV, $8.48, flat)
VIAV March 9 calls (VIAV170317C00009000, $0.37, down $0.01)
Entry Price: $0.37 (12/8/2016)
Exit Target: $1.00
Stop Target: None
Action: Shares traded up to $8.64 Yesterday and within a nickel of its 52-week peak. 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.
PowerShares QQQ Trust (QQQ, $120.46, up $1.50)
QQQ January 122 calls (QQQ170120C00122000, $1.32, up $0.62)
Entry Price: $0.90 (11/30/2016)
Exit Target: $1.80 (Limit Order on 1/2)
Stop Target: $1.12 (Stop Limit)
Action: Set a Limit Order at $1.80 to exit half the trade. Set an initial Stop Limit at $1.12 to protect profits. Yesterday’s high on the calls tapped $1.63.
Fresh resistance is at $121.50-$122. Support is at $120. The QQQ’s tested an all-time high of $121.11 on Tuesday.
Rambus (RMBS, $14.25, up $0.04)
RMBS February 14 calls (RMBS170217C00014000, $0.95, up $0.05)
Entry Price: $0.53 (11/30/2016)
Exit Target: $1.10
Stop Target: 80 cents (Stop Limit)
Action: Resistance is at $14.50 and the 52-week high. Near-term support is at $14-$13.75. Yesterday’s top reached $14.39.
TiVo (TIVO, $21.55, down $0.05)
TIVO January 22.50 calls (TIVO170120C00022500, $0.55, flat)
Entry Price: $0.33 (11/30/2016)
Exit Target: $0.70
Stop Target: None
Action: Support is at $21.25-$21. Resistance is at $22-$22.50.
Chicago Bridge & Iron (CBI, $36.12, down $0.08)
CBI January 35 calls (CBI170120C00035000, $2.10, down $0.10)
Entry Price: $1.25 (11/25/2016)
Exit Target: $3 (closed half at $2.20 on 12/12/2016)
Stop Target: $1.75, raise to $1.85 (Stop Limit)
Action: Raise the Stop Limit from $1.75 to $1.85.
Resistance is at $36.50-$37. Support is at $35-$34.75.
Imax (IMAX,$31.80, down $.30)
IMAX January 36 calls (IMAX170120C00036000, $0.20, flat)
Entry Price: $0.90 (11/23/2016)
Exit Target: $1.80
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.
Lattice Semiconductor (LSCC, $7.12, 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)
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