MomentumOptions.com Pre-Market Update for 2/7/2017
Another Sluggish Monday
The bulls failed to capitalize on Friday’s momentum as the bears won another choppy Monday. The losses were contained as near-term support easily held but the longer-term trading range from early December continues. While this remains a neutral reading, certain stocks and sectors remain in a bullish trend.
The Dow dipped 19 points, or 0.1%, to end at 20,052. The blue-chips opened lower at 20,025 but managed a run to 20,094 shortly afterwards. Upper resistance at 20,000-20,125 held before a backtest to 20,002 during the second half of trading. Support remains at 19,900-19,800 on another move below 20K.
The S&P 500 slipped nearly 5 points, or 0.2%, to finish at 2,292. The index traded in negative territory throughout the session with the low reaching 2,288. Support at 2,275-2,270 wasn’t challenged but could be on a move below 2,285. Resistance is at 2,300-2,325.
The Nasdaq fell 3 points, or 0.1%, to settle at 5,663. Tech struggled for much of Monday but did manage a 2-point pop to 5,668 during the morning action. Lower resistance at 5,675-5,700 held before ensuing weakness into the afternoon. The intraday low of 5,650 held support at 5,625-5,600.
The Russell 2000 declined 11 points, or 0.8%, to close at 1,366. The small-caps were also held underwater throughout yesterday’s session with the low checking-in at 1,364. Lower support at 1,370-1,365 was stretched but held into the closing bell. The bears are still targeting 1,360 and the 50-day moving average this week and a development we need to watch closely. Resistance remains at 1,385-1,390 and the all-time high at 1,392.
The S&P 500 Volatility Index ($VIX, 11.37, up 0.40) stayed elevated while reaching a high of 11.84. Resistance at 12.50-13.50 stood tall with a move above the latter being a bearish development. Support is trying to build a base at 11-10.50 with another possible drop below 10 still in play.
I have updated the parameters from yesterday’s GLD trade. I could also have a New Trade this morning so stay close to your email inboxes.
From desk to press, futures look like this: Dow (-2); S&P 500 (-1); Nasdaq 100 (flat).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 7-1 (88%). 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.
Spider Gold Shares (GLD, $117.71, up $1.58)
GLD March 121 calls (GLD170317C00121000, $1.10, up $0.33)
Entry Price: $0.95 (2/6/2017)
Exit Target: $1.90
Stop Target: 50 cents
Action: Set an Exit Target at $1.90. Set a Stop Target at 50 cents.
Resistance is at $118-$120 and the 200-day moving average. Support is at $117-$116.50 and the 100-day moving average.
Mylan (MYL, $39.98, up $0.77)
MYL March 42.50 calls (MYL170317C00042500, $0.95, up $0.35)
Entry Price: $0.55 (2/3/2017)
Exit Target: $1.10
Stop Target: 70 cents (Stop Limit)
Action: Set an initial Stop Limit at 70 cents to protect profits. MYL garnered a lot of chatter yesterday on the push past $40 and I’m hoping for continued momentum. However, if the trade becomes crowded, we will be out with a nice double-digit profit.
Monday’s high reached $40.25. Near-term resistance is at $40-$40.25. A close above the latter would be a very bullish signal. Rising support is at $39.25-$39.
Viavi Solutions (VIAV, $9.44, up $0.21)
VIAV March 9 calls (VIAV170317C00009000, $0.65, up $0.15)
Entry Price: $0.50 (1/25/2017)
Exit Target: $1.00
Stop Target: None
Action: Shares traded to a 52-week peak of $9.47 yesterday. Fresh resistance is at $9.50-$10. Support is at $9-$8.75.
TherapeuticsMD (TXMD, $5.83, down $0.01)
TXMD June 7.50 calls (TXMD170616C00007500, $0.60, flat)
Entry Price: $0.75 (1/18/2017)
Exit Target: $1.50
Stop Target: None
Action: Support is at $5.75-$5.50. Yesterday’s low tapped $5.77. Resistance is at $6.
Sony (SNE, $31.94, up $0.28)
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 $32. Support is at $31.50-$31.