MomentumOptions.com Mid-Market Update for 2/16/2017
Cisco Systems (CSCO) Tops Estimates
Shares of Cisco Systems (CSCO, $33.72, up $0.90) are rallying nearly 3% today after announcing better-than-expected earnings after Wednesday’s close. The company reported a profit of $0.57 a share on revenue of $11.6 billion. Wall Street was looking for a profit of $0.56 a share on revenue of $11.55 billion. Total gross margins came in at 64%. Impressive.
The company also raised its dividend by 3 pennies to 29 cents with shares currently yielding 3.2% yield. The king of the penny beat should come as no surprise to long-term traders but is causing some pain for short sellers looking for an earnings miss.
I was noticing the stock’s move off above $30 in late January but shares have stayed in a tight trading range into the announcement. The CSCO February 33 calls (CSCO170217C00033000, $0.77, up $0.28) are up 57% after peaking at $1.02 and expire this Friday. The CSCO March 34 calls (CSCO170317C00034000, $0.38, up $0.08) are up 27% and have over a month before expiration.
While disappointed I didn’t swing the bat on s possible earnings trade, I’m happy to see shares have had some influence on Tech and the major indexes as it is owned by many institutions.
Elsewhere, shares of GoDaddy (GDDY, $35.49, down $1.98) are pulling back 5% after topping estimates while lowering revenue guidance for the current quarter. I mentioned this would be a tricky earnings trade and I’m glad I stayed on the sidelines. The heavy put buying in the February strikes were a good warning sign shares might pullback despite a bullish technical setup ahead of the news.
As far as the market, futures were slightly weak throughout the morning and stayed that way into the open. The Dow is down 21 points to 20,590 while the S&P 500 is lower by 5 points to 2,343. The Nasdaq is declining 12 points to 5,806 and the Russell 2000 is off 9 points to 1,395.
I have updated our current trades so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2017: 10-2 (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.
Jabil Circuit (JBL, $25.89, up $0.17)
JBL March 26 calls (JBL170317C00026000, $0.85, up $0.05)
Entry Price: $0.65 (2/13/2017)
Exit Target: $1.30
Stop Target: None
Action: Resistance is at $25.75-$26 with breakout potential to $27-$28. Support is at $25.25-$25.
Flex (FLEX, $16.37, down $0.16)
FLEX April 17 calls (FLEX170421C00017000, $0.33, down $0.04)
Entry Price: $0.35 (2/15/2017)
Exit Target: $0.70
Stop Target: None
FLEX March 16 calls (FLEX170317C00016000, $0.60, down $0.10)
Entry Price: $0.40 (2/10/2017)
Exit Target: $1.10
Stop Target: 50 cents (Stop Limit)
Action: Support is at $16.25-$16. Resistance is at $16.75-$17.
Viavi Solutions (VIAV, $10.67, down $0.09)
VIAV March 10 calls (VIAV170317C00010000, $0.80, down $0.15)
Entry Price: $0.40 (2/8/2017)
Exit Target: $1.20
Stop Target: 70 cents (Stop Limit)
VIAV March 9 calls (VIAV170317C00009000, $1.75, down $0.10)
Entry Price: $0.50 (1/25/2017)
Exit Target: $2.00 (Limit Order on third)
Stop Target: $1.55 (Stop Limit)
Action: Support is at $10.75-$10.50. Resistance is at $11-$11.25.
Boston Scientific (BSX, $25.26, down $0.15)
BSX March 25 calls (BSX170317C00025000, $0.95, down $0.05)
Entry Price: $0.70 (2/7/2017)
Exit Target: $1.40
Stop Target: 75 cents (Stop Limit)
Action: Support is at $25-$24.75. Resistance is at $25.50-$25.75.
TherapeuticsMD (TXMD, $5.78, down $0.11)
TXMD June 7.50 calls (TXMD170616C00007500, $0.65, flat)
Entry Price: $0.75 (1/18/2017)
Exit Target: $1.50
Stop Target: None
Action: Support is at $5.75-$5.50. Resistance is at $6.