MomentumOptions.com Mid-Market Update for 3/16/2017

Oracle (ORCL) Tops Estimates

3:05pm (EST)

Although first-quarter earnings season is still a few weeks away, companies in different fiscal years and quarters will be announcing numbers throughout March. Tech giant, Oracle (ORCL), seems to slip under the radar each cycle, as the stock rarely makes dramatic moves and tends to trade lower after announcing unflattering numbers.

Last night was a different story, as the company announced earnings after Wednesday’s closing bell and the Fed’s rate hike that caught the attention of Wall Street throughout the session. Oracle reported a profit of $0.69 a share on revenue of $9.2 billion versus a forecast for $0.62 a share on sales of $9.26 billion.

The revenue miss was a broken record but the suit-and-ties overlooked it once again. They got excited about raised guidance of $0.78-$0.82 a share for the current quarter versus expectations for the lower end of the aforementioned range.

Shares have traded to a fresh 52-week high of $46.99 today on heavy volume. The 5% pop in the stock is being highlighted by the talking heads but the bullish option traders that went long ahead of the news are even more elated.

The regular ORCL March 44 calls (ORCL170317C00044000, $1.86, up $1.55) expire this Friday but traded over 20,000 contracts on Wednesday. These options are up 500% today.

The regular ORCL April 44 calls (ORCL170421C00044000, $1.29, up $1.01) were slightly more expensive but would have allowed a bullish trade more time to play out. These call options are up 360% after settling yesterday at 28 cents ahead of the close.

There are weekly options to trade on ORCL but I often mention they have wider bid/ ask spreads and volume is much lighter.

Traders that bought put options on calculations shares might make a backtest to $42-$40 are feeling the pinch. Put premiums have been whacked on the breakout to blue-sky territory and fresh 52-week peaks.

I often mention earnings trades can be tricky no matter how much fundamental and technical analysis is applied to a stock or company. In any event, these types of trades are why we play the game.

The Dow is lower by 34 points to 20,915 while the S&P 500 is slipping 6 points to 2,379. The Nasdaq is off 7 points to 5,893 and the Russell 2000 is up 4 points to 1,386.

I have updated our current trades so let’s go check the tape.

 

Momentum Options Play List

Closed Momentum Options Trades for 2017: 18-3 (86%). 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.

 

Viavi Solutions (VIAV, $10.20, up $0.30)

VIAV April 10 calls (VIAV170421C00010000, $0.58, up $0.15)

Entry Price: $0.45 (3/15/2017)
Exit Target: $0.90
Return: 29%
Stop Target: None

VIAV June 11 calls (VIAV170616C00011000, $0.50, up $0.10)

Entry Price: $0.40 (3/15/2017)
Exit Target: $0.80
Return: 25%
Stop Target: None

Action: Resistance is at $10-$10.25. Support is at $9.50 with risk to $9.25-$9 on a close below this level.

 

Starbucks (SBUX, $54.79, up $0.25)

April 52.50 puts (SBUX170421P00052500, $0.22, down $0.11)

Entry Price: $0.40 (3/10/2017)
Exit Target: $0.80
Return: -45%
Stop Target: None

Action: Near-term resistance is at $54.75-$55. Support is at $54-$53.50.

 

Amicus Therapeutics (FOLD, $7.05, up $0.14)

FOLD April 8 calls (FOLD170421C00008000, $0.30, flat)

Entry Price: $0.60 (3/2/2017)
Exit Target: $1.20
Return: -50%
Stop Target: None

Action: Support is at $7-$6.75. Resistance is at $7.25-$7.50.

 

Tower Semiconductor (TSEM, $22.77, down $0.31)

TSEM April 24 calls (TSEM170421C00024000, $0.30, down $0.10)

Entry Price: $0.65 (3/1/2017)
Exit Target: $1.30
Return: -54%
Stop Target: None

Action: Support is at $22.75-$22.50. Resistance is at $23.25-$23.50.

 

Flex (FLEX, $16.89, up $0.01)

FLEX April 17 calls (FLEX170421C00017000, $0.35, flat)

Entry Price: $0.35 (2/15/2017)
Exit Target: $0.70
Return: 0%
Stop Target: None

Action: Resistance is at $17-$17.25. Support is at $16.75-$16.50.

 

TherapeuticsMD (TXMD, $6.93, up $0.10)

TXMD June 7.50 calls (TXMD170616C00007500, $0.95, flat)

Entry Price: $0.75 (1/18/2017)
Exit Target: $1.50
Return: 27%
Stop Target: None

Action: Resistance is at $7-$7.25. Support is at $6.75-$6.50.