MomentumOptions.com Mid-Market Update for 3/7/2017
Healthcare Sector Pulls Back/ New Trade (AMD)
1:55pm (EST)
The bulls are doing a little better today than Monday’s action as they were able to push the major averages higher shortly after the open. However, the choppy action and tight trading range has returned heading into the close with the Healthcare sector the weakest link.
Some of the blame in the sector can be attributed to tepid reception to the President’s new healthcare plan to replace Obamacare along with a tweet from Trump regarding drug prices.
The rest of the week could be more of the same type of action as Wall Street appears to be content to wait on the sidelines ahead of Friday’s nonfarm payroll report on Friday. While I don’t believe the numbers will have a major impact on the market, the Fed will be paying close attention ahead of a possible rate hike.
The market is pricing in a 90% chance a quarter-point rate hike could come this month but something that has already been well telegraphed. If the zombies do up rates, it will only be the third time in the past 10 years. How the market reacts is another story.
The Dow is up 118 points to 21,190 while the S&P 500 is gaining 10 points to 2,398. The Nasdaq is surging 26 points to 5,911 and the Russell 2000 is climbing 10 points to 1,415.
I mentioned I was targeting a possible trade in AMD today. Shares had fallen 20% off last week’s 52-week peak of $15.55 to yesterday’s intraday low of $12.38. Near-term support held and I’m looking for a 10%-15% rebound in the stock over the next month or so.
Momentum Options Play List
Closed Momentum Options Trades for 2017: 16-2 (89%). 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 a Trade Alert outside of these time frames.
New Trade
Advanced Micro Devices (AMD, $13.21, up $0.17)
Buy to Open AMD April 14 calls (AMD170421C00014000, $0.90, up $0.09)
Action: I like these call options at current levels and you can use a Limit Order up to $1.05 to get the best fills. These are the regular AMD April 14 calls that expire on April 21st, 2017. I will provide the parameters of the trade in tomorrow’s Pre-Market update.
Current Trades
Amicus Therapeutics (FOLD, $7.11, down $0.58)
FOLD April 8 calls (FOLD170421C00008000, $0.40, down $0.20)
Entry Price: $0.60 (3/2/2017)
Exit Target: $1.20
Return: -33%
Stop Target: None
Action: Support is at $7-$6.75. Lowered resistance is at $7.50.
Tower Semiconductor (TSEM, $23.21, flat)
TSEM April 24 calls (TSEM170421C00024000, $0.55, flat)
Entry Price: $0.65 (3/1/2017)
Exit Target: $1.30
Return: -15%
Stop Target: None
Action: Resistance at $23.25-$23.50. Support is at $23-$22.50.
Vuzix (VUZI, $7.05, down $0.15)
VUZI April 7.50 calls (VUZI170421C00007500, $0.50, down $0.05)
Entry Price: $0.50 (2/27/2017)
Exit Target: $1.00
Return: 0%
Stop Target: None
Action: Support is at $7-$6.75. Resistance is at $7.50-$7.75.
3D Systems (DDD, $14.65, up $0.01)
March 18 calls (DDD170317C00018000, $0.05, flat)
Entry Price: $0.45 (2/22/2017)
Exit Target: $1.00
Return: -89%
Stop Target: None
Action: Resistance is at $14.75-$15. Support is at $14.50-$14.25.
Flex (FLEX, $16.50, up $0.23)
FLEX April 17 calls (FLEX170421C00017000, $0.25, up $0.05)
Entry Price: $0.35 (2/15/2017)
Exit Target: $0.70
Return: -29%
Stop Target: None
Action: Resistance is at $16.50-$16.75. Support is at $16.25-$16.
TherapeuticsMD (TXMD, $6.53, up $0.05)
TXMD June 7.50 calls (TXMD170616C00007500, $0.80, flat)
Entry Price: $0.75 (1/18/2017)
Exit Target: $1.50
Return: 7%
Stop Target: None
Action: Support is at $6.50-$6.25. Resistance is at $6.75-$7.
