Mid-Market Update for 12/23/2016

Bears on Track for Weekly Win/ New Trade (SNE)

2:55pm (EST)

I mentioned the last trading day ahead of Christmas was typically a bullish session and today’s action has tilted that way. The blue-chips are slightly lower and are trying to avoid a three session slide but Tech and the small-caps are pushing higher highs.

The Dow is lower by 3 points to 19,916 while the S&P 500 is up less than a point to 2,261. The Nasdaq is adding 6 points to 5,453 and the Russell 2000 is gaining 5 points to 1,368.

Next week is shortened due to the holiday observance and this only leaves four trading days left for 2016. While I mentioned I wouldn’t likely add to our current trades, there is a candidate on a stock I have traded throughout the years.

This time, I’m bearish on Sony (SNE) and I don’t mind adding a hedge trade to the portfolio in case Santa skips Wall Street again this year. Last year’s Santa rally failed to materialize and was an early signal this past January would be a rough month.

I realize many of you will be busy over the holiday but I wanted to include my current promotion as many subscribers have memberships expiring this month, and remember, a purchase to either newsletter can usually be written off on your taxes. I will be back on Tuesday with a full update. Until then, have a super Christmas!


Momentum Options Play List

Closed Momentum Options Trades for 2016: 87-36 (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.


New Trade!

Sony (SNE, 28.47, up $0.12)

Buy to Open January 27.50 puts (SNE170120P00027500, $0.30, flat)

Buy to Open February 27 puts (SNE170217P00027000, $0.65, down $0.05)

Action: I like both put options at current levels. Use a Limit Order up to 40 cents on the January 27.50 puts. Use a Limit Order up to 80 cents on the February 27 puts. I’m expecting a triple-digit profit as shares could test $26-$25 by mid-February.

These are the regular SNE January 27.50 put options that expire on January 20th, 2017 and the February 27 puts that expire on February 17th, 2017. I will provide the parameters of the trade in Tuesday’s Pre-Market update.

Resistance is at $28.75-$29. Support is at $28.25-$28 with a close below the latter being a bearish development. A death cross is in the process of forming with the 50-day moving average in a steady decline and headed for a move below the 200-day moving average.


Current Trades

Array Biopharma (ARRY, $8.82, up $0.21)

ARRY March 10 calls (ARRY170317C00010000, $0.95, up $0.10)

Entry Price: $0.85 (12/21/2016)
Exit Target: $1.70
Return: 11%
Stop Target: None

Action: Near-term resistance is at $8.75-$9. The recent 52-week peak is at $9. Support at $8.50-$8.25.


CVS Health (CVS, $79.14, up $0.35)

CVS January 82.50 calls (CVS170120C00082500, $0.45, up $0.05)

Entry Price: $0.68 (12/20/2016)
Exit Target: $1.40
Return: -36%
Stop Target: None

Action: Support is at $78.50-$78. Resistance is at $80-$80.50 and the 50-day moving average.


Viavi Solutions (VIAV, $8.32, flat)

VIAV March 9 calls (VIAV170317C00009000, $0.32, flat)

Entry Price: $0.37 (12/8/2016)
Exit Target: $1.00
Return: -14%
Stop Target: None

Action: Support is at $8.25-$8. Resistance is at $8.35-$8.40.


TiVo (TIVO, $20.25, down $0.15)

TIVO January 22.50 calls (TIVO170120C00022500, $0.20, flat)

Entry Price: $0.33 (11/30/2016)
Exit Target: $0.70
Return: -39%
Stop Target: None

Action: Support is at $20.50-$20 and the 50-day moving average. Resistance is at $21.25-$21.50.