Pre-Market Update for 12/28/2016

Bulls Keep Momentum

8:00am (EST)

The bulls showed continued signs higher highs are still in play following Tuesday’s run to another record high. Tech led the way with the other major indexes coming close to setting fresh highs. Volatility stayed subdued but needs to be watched, especially during a shortened trading week.

The Dow gained 11 points, or 0.1%, to finish at 19,945. The blue-chips held positive territory throughout the day while reaching a high of 19,980. Lower resistance at 19,900-20,000 held for the fifth-straight session with the all-time high at 19,987. Support at 19,800 has held for eigth-straight sessions with backup at 19,600-19,500.

The S&P 500 advanced 5 points, or 0.2%, to close at 2,268. The index made a run to 2,273 intraday but fell just shy of resistance at 2,275-2,300. Support remains at 2,260-2,250 with backup at 2,240-2,235.

The Nasdaq jumped 24 points, or 0.5%, to settle at 5,487. Tech tested a record high of 5,512 while clearing upper resistance at 5,475-5,500. Continued closes above the latter could led to 5,550-5,600. Rising support is at 5,450-5,425 with a move back below 5,400 a likely warning sign.

The Russell 2000 climbed 6 points, or 0.5%, to end at 1,377. The small-caps came with a point of its record high after reaching a peak of 1,382 intraday. The close above lower resistance at 1,375-1,400 was a bullish sign. Support is at 1,360-1,350 on a move back below 1,370.

The S&P 500 Volatility Index ($VIX, 11.99, up 0.55) stayed slightly elevated throughout the session after perking up to 12.33. Resistance at 12.50-13.50 easily held but the close above 11.50 bears caution. Longer-term support is at 10.50-10.


Momentum Options Play List

Closed Momentum Options Trades for 2016: 87-37 (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.


Sony (SNE, 28.38, down $0.06)

January 27.50 puts (SNE170120P00027500, $0.40, up $0.10)

Entry Price: $0.30 (12/23/2016)
Exit Target: $0.60
Return: 33%
Stop Target: None

February 27 puts (SNE170217P00027000, $0.65, flat)

Entry Price: $0.65 (12/23/2016)
Exit Target: $1.30
Return: 0%
Stop Target: None

Action: Shares traded down to $28.29 yesterday. Support is at $28.25-$28. Resistance is at $28.75-$29.


Array Biopharma (ARRY, $8.80, flat)

ARRY March 10 calls (ARRY170317C00010000, $0.95, flat)

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

Action: AARY tested a high of $8.96 yesterday. Near-term resistance is at $8.75-$9. A close above the latter could lead to a breakout to double-digits. The recent 52-week peak is at $9. Support at $8.50-$8.25.


CVS Health (CVS, $79.29, up $0.15)

CVS January 82.50 calls (CVS170120C00082500, $0.45, flat)

Entry Price: $0.68 (12/20/2016)
Exit Target: $1.40
Return: -34%
Stop Target: None

Action: Shares traded to a high of $79.72 on Tuesday. Resistance is at $80-$80.50 and the 50-day moving average. Support is at $78.50-$78.


Viavi Solutions (VIAV, $8.41, up $0.04)

VIAV March 9 calls (VIAV170317C00009000, $0.28, flat)

Entry Price: $0.37 (12/8/2016)
Exit Target: $1.00
Return: -24%
Stop Target: None

Action: Resistance is at $8.50-$8.60. Tuesday’s high reached $8.49. Support is at $8.25-$8.