Pre-Market Update for 2/24/2017

Retail Stocks Take a Hit

8:00am (EST)

The Retail stocks took a turn for the worse late Thursday after renewed chatter and the ongoing debate over a boarder and import taxes heated up. The good news is the market tripped one of my lower fluff targets as the blue-chips made it 10-straight session wins. The bad news is the choppiness could linger into next week with Tech and the small-caps now showing losses for this week.

The Dow advanced 34 points, or 0.2%, to settle at 20,810. The blue-chips were strong for much of the session following a brief trip into the red to 20,746. The 29-point pullback easily held near-term support at 20,600-20,550. The run to 20,840 midday and close above lower resistance at 20,800-21,000 was a bullish signal. I would like to see 20,750 hold on any weakness ahead of the weekend.

The S&P 500 gained a point, or 0.04%, to end at 2,364. The index set a fresh record high of 2,368 in the opening minutes but failed my near-term fluff targets and resistance at 2,375-2,400. The backtest to 2,355 shortly afterwards held fresh support at 2,350-2,325. The positive close was a slightly bullish sign as longer as a lower low doesn’t print during today’s session.

The Nasdaq dropped 25 points, or 0.4%, to finish at 5,835. Tech tested a high just south of 5,867 but missed a fresh all-time high by a point with resistance at 5,875-5,900 the bigger challenge. Support at 5,825-5,800 was tested following the move below 5,850 and low of 5,809. Backup help is at 5,750 if 5,800 fails.

The Russell 2000 fell 9 points, or 0.7%, to close at 1,394. The small-caps opened higher and made a 3-point run to 1,406 with resistance at 1,415-1,425 easily holding. I mentioned a move below support at 1,405-1,400 could lead to 1,390-1,385 with yesterday’s low reaching the latter. Fresh backup is at 1,370-1,365 if 1,385 fails into the weekend.

The S&P 500 Volatility Index ($VIX, 11.71, down 0.03) spiked to a high of 12.46 during the first half of action with lower resistance at 12.50-13.50 holding for the 4th-straight session. The low shortly after the open held support at 11-10.50. If upper support and lower resistance continue to hold, we might have to prepare for another possible trading range with a backtest to fresh support levels.

The action in Kohl’s (KSS, $40.91, down $0.87) continues to look bearish and most of you know it is one of my favorite retail stocks to short. I’m still doing some homework and math to find the best options to trade on a move below $40.75-$40.50. The company recently reported a decent quarter but the technical setup remains bearish.

I could have a New Trade this morning on KSS, or another stock, so stay close to your email inboxes.

From desk to press, futures look like this: Dow (-87); S&P 500 (-11); Nasdaq 100 (-30).


Momentum Options Play List

Closed Momentum Options Trades for 2017: 14-2 (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.


3D Systems (DDD, $16.63, down $0.20)

March 18 calls (DDD170317C00018000, $0.40, down $0.07)

Entry Price: $0.45 (2/22/2017)
Exit Target: $1.00
Return: -11%
Stop Target: None

Action: Thursday’s low reached $16.46. Support is at $16.50-$16.25. Near-term resistance at $16.75-$17.


Jabil Circuit (JBL, $26.14, down $0.15)

JBL March 26 calls (JBL170317C00026000, $0.95, down $0.10)

Entry Price: $0.65 (2/13/2017)
Exit Target: $1.30
Return: 46%
Stop Target: 80 cents (Stop Limit)

Action: Shares traded down to $25.99 yesterday. Near-term support is at $25.75-$25.50 on a close below $26. Resistance is at $26.50-$26.75.


Flex (FLEX, $16.71, down $0.05)

FLEX April 17 calls (FLEX170421C00017000, $0.40, down $0.05)

Entry Price: $0.35 (2/15/2017)
Exit Target: $0.70
Return: 14%
Stop Target: None

Action: FLEX reached a fresh 52-week peak of $16.88 before pulling back on Thursday. Support is at $16.50-$16.25. Resistance is at $17-$17.25.


TherapeuticsMD (TXMD, $5.64, down $0.03)

TXMD June 7.50 calls (TXMD170616C00007500, $0.45, flat)

Entry Price: $0.75 (1/18/2017)
Exit Target: $1.50
Return: -40%
Stop Target: None

Action: Resistance is at $6. Support is at $5.50-$5.40.