MomentumOptions.com Mid-Market Update for 2/1/2017
First Half Rally Fizzles/ Profit Alert (GDOT)
The first trading day of February has been bullish since the turn of the new century and today’s action was backing that statistic. Apple’s better-than-expected earnings, and its nearly $250 billion in its cash coffers, had the bulls giddy with a fresh shot of energy. Shares are up 6% and have traded to a high of $128.56 today.
I mentioned today’s action would likely be a crucial pivot point after predicting weakness into midweek and that was going good before the pullback into negative territory. How long a bullish rebound continues remains to be seen but I don’t mind the back-and-forth action as I have been deadly accurate in predicting market direction.
My yearly February predictions have also been incredibly accurate and the past five years have been amazing to forecast. I was the lone wolf option newsletter that said the Dow would trip 20,000 and Nasdaq 5,000 in February 2015! I also predicted a President Trump victory in July 2015, the day he announced, and was shown the door by the infamous “elite” publication that failed to honor its contract obligations.
It feels good to be right but I also know in this business that you are only as good as your last year. I would say last trade but I want you to know that trading is for the long haul not just for a few weeks and months. It is a demanding job that takes 80 hours of research a week. Luckily, you have me and my NEW team, and I thank you for your recent subscription purchases.
I will be making my yearly forecasts by the end of the month, but right now, it is good to see the bulls rebound and I want to take advantage of possible trade setups. The portfolio still has plenty of room to add new trades and I mentioned new highs could be in play through mid-February. However, today’s upcoming Fed meeting has caused some market nervousness and higher highs aren’t a given.
The Dow is gaining 4 points to 19,867 while the S&P 500 is down 3 points to 2,275. The Nasdaq is advancing 15 points to 5,630 and the Russell 2000 is off a half-point to 1,361.
I have a updated our current trades, including a Profit Alert for the other half of our GDOT trade. Stay locked-and-loaded into the close in case I take additional action.
Momentum Options Play List
Closed Momentum Options Trades for 2017: 5-1 (83%). All trades are dated and time stamped for verification. New subscribers can look at the past history to see how the trades have played out or to research our Track Records.
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.
iShares Russell 2000 (IWM, $135.31, up $0.08)
IWM March 138 calls (IWM170317C00138000, $1.90, down 0.03)
Entry Price: $1.50 (1/31/2017)
Exit Target: $3
Stop Target: $1.55, raise to $1.70 (Stop Limit)
Action: Raise the Stop Target at $1.55 to $1.70. Today’s low on the calls has been $1.82.
Resistance is at $136-$136.50. Support is at $135-$135.
Viavi Solutions (VIAV, $9.10, up $0.15)
VIAV March 9 calls (VIAV170317C00009000, $0.50, flat)
Entry Price: $0.50 (1/25/2017)
Exit Target: $1.00
Stop Target: None
Action: Resistance is at $9-$9.25 with a move above the latter likely leading to $10 and fresh 52-week peaks. Support is at $8.75-$8.50.
TherapeuticsMD (TXMD, $5.80, down $0.01)
TXMD June 7.50 calls (TXMD170616C00007500, $0.65, flat)
Entry Price: $0.75 (1/18/2017)
Exit Target: $1.50
Stop Target: None
Action: Resistance is at $6. Support has moved up to $5.50-$5.25.
Green Dot (GDOT, $26.62, down $0.18)
GDOT March 25 calls (GDOT170317C00025000, $2.20, down $0.20)
Entry Price: $1.30 (1/6/2017)
Exit Target: $5 (closed half at $3 on 1/26/17)
Stop Target: $2 (Stop Limit on other half)
Action: Close the other half of the trade at current levels to lock-in a triple-digit profit.
Sony (SNE, $30.09, down $0.18)
February 27 puts (SNE170217P00027000, $0.10, flat)
Entry Price: $0.65 (12/23/2016)
Exit Target: $1.30 (closed half at 10 cents on 1/23/17)
Stop Target: None
Action: Resistance is at $30.50. Support is at $29.75-$29.50.