MomentumOptions.com Mid-Market Update for 4/3/2017

Small-Caps Lead Pullback

1:55pm (EST)

The Monday woes are continuing for the bulls as the blue-chips are facing their fifth-straight loss to start the week. The index is off its low and still has a chance to finish higher but it ain’t looking too good. The small-caps are having the most trouble but are holding near-term support.

Oil prices are slightly lower and are just above the $50 a barrel with Brent Oil holding the $53 level.

In economic news, U.S. auto sales were a disappointment and are weighing on the stocks in the sector. Shares of Ford (F, $11.35, down $0.29) are down nearly 3% after the reporting sales declined 7.2% from a year ago in March. The stock has tested a low of $11.28 with the 52-week low at $11.07. The company also issued a safety compliance recall over the weekend for over 50,000 model year 2017 Ford F-250 trucks for unintended movement while in park.

Meanwhile, General Motors (GM, $33.98, down $1.38) shares are off 4% as its March U.S. sales growth of 1.6% missed expectations. The struggle at the 100-day moving average and low of $33.80 is signaling continued weakness $33.50-$33 and the 200-day moving average. Longer-term, a backtest to $30 could be in the mix.

Rising discounts and increased inventory levels at dealerships might be signaling the market is cooling off. I would be a possible buyer of F, long-term, if shares fall near $10 and I’m looking at a possible bearish trade on GM.

One auto stock bucking the trend is Tesla (TSLA, $293.76, up $15.46) with shares setting another fresh 52-week peak of $294.49 intraday. I don’t trade options on TSLA due to the expensive nature of the calls and puts but do follow the stock. If today’s gains hold, and GM’s losses stick, Tesla will have a larger market cap than GM.

The Dow is down 70 points to 20,592 while the S&P 500 is off 10 points to 2,352. The Nasdaq is lower by 26 points to 5,884 and the Russell 2000 is sinking 15 points to 1,370.

I have updated our current trades so let’s go check the action. I’m still looking at a possible New Trade today so stay locked-and-loaded into the closing bell in case I pull the trigger.

 

Momentum Options Play List

Closed Momentum Options Trades for 2017: 21-4 (84%). 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.

 

STMicroelectronics (STM, $15.26, down $0.20)

STM May 15 calls (STM170519C00015000, $1.10, down $0.05)

Entry Price: $1.15 (3/31/2017)
Exit Target: $2.30
Return: -4%
Stop Target: 55 cents

Action: Support is at $15.25-$15. Resistance at $15.50-$15.75.

 

TherapeuticsMD (TXMD, $7.30, up $0.10)

TXMD May 7.50 calls (TXMD170519C00007500, $0.95, up $0.05)

Entry Price: $0.80 (3/27/2017)
Exit Target: $1.60
Return: 19%
Stop Target: None

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

 

Viavi Solutions (VIAV, $10.40, down $0.32)

VIAV May 12 calls (VIAV170519C00012000, $0.15, down $0.09)

Entry Price: $0.29 (3/27/2017)
Exit Target: $0.60
Return: -48%
Stop Target: None

VIAV April 11 calls (VIAV170421C00011000, $0.15, down $0.08)

Entry Price: $0.42 (3/20/2017)
Exit Target: $0.85
Return: -64%
Stop Target: None

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

 

Amicus Therapeutics (FOLD, $7.32, up $0.19)

FOLD April 8 calls (FOLD170421C00008000, $0.15, flat)

Entry Price: $0.60 (3/2/2017)
Exit Target: $1.20
Return: -75%
Stop Target: None

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

 

Tower Semiconductor (TSEM, $22.71, down $0.34)

TSEM April 24 calls (TSEM170421C00024000, $0.15, down $0.10)

Entry Price: $0.65 (3/1/2017)
Exit Target: $1.30
Return: -77%
Stop Target: None

Action: Support is at $22.75-$22.50. Resistance is at $23-$23.25.

 

Flex (FLEX, $16.58, down $0.22)

FLEX April 17 calls (FLEX170421C00017000, $0.10, down $0.10)

Entry Price: $0.35 (2/15/2017)
Exit Target: $0.70
Return: -71%
Stop Target: None

Action: Support is at $16.50-$16.25. Resistance is at $16.75-$17.