MomentumOptions.com Mid-Market Update for 3/22/2017

50-Day Moving Averages Hold

2:25pm (EST)

Futures were showing a rocky open and a possible continued backtest to the 50/100-day moving averages throughout the morning. The swift pullback has the slick talking pros feeling nervous despite their catcalls for an opportunity to buy stocks at lower prices. The talking heads labeled yesterday’s 1% pullback as a selloff with numerous pundits saying, yet again, a market top is in.

While one could be, it is best to evaluate the indexes with chart work to see if the pullback represents another buying opportunity, or a trend change, before making a definitive conclusion. It is why I spend countless hours trying to stay one step ahead of the blabbermouths.

It is also been tempting to buy short-term put options but I don’t want to have too many open positions in a whipsaw market, especially if there is a rebound later this month or in April. If the 50-day moving averages, and the 100-day moving average on the small-caps, can hold the rest of the week, there could be another opportunity to load up on call options. However, continues closes below the major moving averages should offer a number of selective put option opportunities over the next few weeks to make some quick profits.

Despite the weaker open, the market has shown some strength today but volatility is still bubbling. The Dow is down 26 points to 20,641 while the S&P 500 is gaining 2 points to 2,346. The Nasdaq is higher by 15 points to 5,809 and the Russell 2000 is down 8 points to 1,338.

I have updated our current trades and stay locked-and-loaded into the closing bell in caseI take action on a possible earnings trade for GME.

 

Momentum Options Play List

Closed Momentum Options Trades for 2017: 20-3 (87%). 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, $10.72, up $0.10)

VIAV April 11 calls (VIAV170421C00011000, $0.38, up $0.04)

Entry Price: $0.42 (3/20/2017)
Exit Target: $0.85
Return: -10%
Stop Target: None

VIAV June 11 calls (VIAV170616C00011000, $0.75, up $0.05)

Entry Price: $0.40 (3/15/2017)
Exit Target: $1.20
Return: 88%
Stop Target: 60 cents (Stop Limit)

Action: Resistance is at $10.75-$11. Support is at $10.50-$10.25.

 

Starbucks (SBUX, $55.84, up $0.30)

April 52.50 puts (SBUX170421P00052500, $0.15, flat)

Entry Price: $0.40 (3/10/2017)
Exit Target: $0.80
Return: -62%
Stop Target: None

Action: Resistance is at $56-$56.50. Support is at $55.50-$55.

 

Amicus Therapeutics (FOLD, $6.97, up $0.15)

FOLD April 8 calls (FOLD170421C00008000, $0.20, flat)

Entry Price: $0.60 (3/2/2017)
Exit Target: $1.20
Return: -67%
Stop Target: None

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

 

Tower Semiconductor (TSEM, $22.87, up $0.15)

TSEM April 24 calls (TSEM170421C00024000, $0.30, flat)

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

Action: Resistance is at $23-$23.25. Support is at $22.50-$22.25.

 

Flex (FLEX, $16.57, up $0.20)

FLEX April 17 calls (FLEX170421C00017000, $0.15, flat)

Entry Price: $0.35 (2/15/2017)
Exit Target: $0.70
Return: -57%
Stop Target: None

Action: Resistance is at $16.50-$16.75. Support is at $16.25-$16.