Mid-Market Update for 1/17/2017

Watching Netflix (NFLX) Earnings for a Short/ Profit Alert (TSEM)

1:15pm (EST)

I covered a number of companies reporting earnings today and tomorrow, mainly in the Financial sector. However, there are a number of other stocks worth watching that will help shape the market’s movements throughout the rest of the week, as well.

Another big name reporting after today’s close includes CSX (CSX). I have talked about continued strength in the Transports would also be a bullish sign going forward and a beat-and-raise quarter from one of the Railroad stocks would be sweet.

For Wednesday’s action, earnings from US Bancorp (USB) and Neflix (NFLX). Netflix shares cleared $135 earlier this morning that represented a fresh all-time high. For the short-sellers that have been waiting for another drop back to double-digits, following the mid-October break above $115. A backtest to $110 in mid-November and $115 have been the only buying opportunity since. Both times, the 50-day moving average held.

While it is never easy shorting a strong stock, an earnings miss, or lowered guidance, could send shares down 8%-10% and near $125-$120. However, I wouldn’t short shares until there are continued closes below $110. Of course, if Netflix hits it out of the park with their earnings pitch, shares could make a run towards $145-$140. I have no bullish option recommendations for this high-flyer, unless $110 comes into play at some point in the coming weeks, or months.

On Thursday, American Express (AXP), BB&T (BBT), International Business Machines (IBM), JB Hunt (JBHT), Skyworks Solutions (SWKS), Union Pacific (UNP) will report their quarterly results.

The shortened week wraps up with numbers out of Citizens (CFG), General Electric (GE), Kansas City Southern (KSU), Schlumberger (SLB), and SunTrust Banks (STI).

Futures were showing a nasty open early this AM to start today’s session but improved dramatically ahead of the opening bell. The Dow futures were down just over triple-digits but the red figure was cut to less than half ahead of the start of trading. A rally off the lows has improved today’s mode and a positive close would be a bullish clue support could stand strong the rest of the week.

The Dow is down 42 points to 19,843 while the S&P 500 is off 5 points to 2,269. The Nasdaq is declining 29 points to 5,545 and the Russell 2000 is lower by 12 points to 1,360. While today’s pullback keeps the current trading ranges intact, volatility is trying to hold key resistance levels. The S&P 500 Volatility Index ($VIX, 11.86, up 0.63) is up nearly 6% but is holding lower support at the 12.50 level.

I have updated our current trades, including a triple-digit (100%) Profit Alert for (TSEM), so let’s go check the tape.


Momentum Options Play List

Closed Momentum Options Trades for 2017: 2-0 (100%). 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 8am and 12pm–2pm (EST) updates. Also, I will usually give you a heads-up if I think I’m going to send an Trade Alerts outside of these time frames.

Transocean (RIG, $15.63, up $0.15)

RIG March 17 calls (RIG170317C00017000, $0.66, up $0.03)

Entry Price: $0.66 (1/13/2017)
Exit Target: $1.35
Return: 0%
Stop Target: None

Action: Near-term resistance is at $15.75-$16. Support is at $15.25-$15.


Tower Semiconductor (TSEM, $20.04, down $0.35)

TSEM February 21 calls (TSEM170217C00021000, $0.65, down $0.05)

Entry Price: $0.65 (1/11/2017)
Exit Target: $1.30
Return: 0%
Stop Target: None

TSEM February 20 calls (TSEM170217C00020000, $1.15, down $0.10)

Entry Price: $0.55 (1/3/2017)
Exit Target: $2 (closed 1/3 @ $1.10)
Return: 100%
Stop Target: $1.10 (Stop Limit)

Action: The Stop Limit at $1.10 on the February 20 calls has tripped on the remaining 2/3rd’s of the trade.

Support is at $20-$19.75. Resistance is at $20.75-$21.


Green Dot (GDOT, $25.21, down $0.07)

GDOT March 25 calls (GDOT170317C00025000, $1.45, flat)

Entry Price: $1.30 (1/6/2017)
Exit Target: $2.60
Return: 12%
Stop Target: $1

Action: Resistance is at $25.50-$25.75. Support is at $25-$24.75.


Sprint (S, $8.76, up $0.15)

S February 9 calls (S170317C00009000, $0.45, up $0.06)

Entry Price: $0.54 (1/6/2017)
Exit Target: $1.10
Return: -17%
Stop Target: None

Action: Resistance is at $8.75-$9. Support is at $8.50-$8.25.


Sony (SNE, $30.97, down $0.05)

February 27 puts (SNE170217P00027000, $0.15, flat)

Entry Price: $0.65 (12/23/2016)
Exit Target: $1.30
Return: -77%
Stop Target: 10 cents (Limit Order on half)

Action: Resistance is at $31.25-$31.50. Support is at $31-$30.50.