MomentumOptions.com Pre-Market Update for 4/11/2017
Bulls Get Monday Win/ Trade Alert (FLEX)
The Dow ended a 5-straight Monday losing streak but yesterday’s overall market gains were about as flat as you can get. The back-and-forth session had an overall bearish tone as resistance easily held while volatility spiked to a fresh closing high for the year. The resiliency the bulls have shown since mid-March has been brilliant but the bears are slowing gathering momentum.
The Dow gained 2 points, or 0.01%, to close at 20,658. The blue-chips traded to a high of 20,750 but stalled at lower resistance at 20,750-20,800 that has been holding since late March. The midday drop to 20,614 held upper support at 20,600-20,550 for the 10th-straight session. The higher higher and higher low than Friday’s action was a slightly bullish signal.
The S&P 500 added over a point, or 0.1%, to end at 2,357. The index reached its peak of 2,366 shortly after the open with resistance at 2,370-2,375 easily holding. The intraday backtest to 2,353 held upper support at 2,350-2,340. The higher higher and higher low were also encouraging but stay guarded.
The Nasdaq climbed 3 points, or 0.1%, to finish at 5,880. Tech held positive territory for much of Monday while tapping a high of 5,907. Lower resistance at 5,900-5,925 was cleared but failed to hold. Support at 5,850 also held on the dip to 5,865. Backup help is at 5,825-5,800 and the 50-day moving average on a move below this level.
The Russell 2000 advanced 2 points, or 0.2%, to settle flat at 1,367. The small-caps made a run past lower resistance at 1,375-1,380 while peaking at 1,376 shortly after the open but failed clearing the 50-day moving average. Upper support at 1,360-1,350 was tested but held intraday following the trip to 1,361.
The S&P 500 Volatility Index ($VIX, 14.05, up 1.18) jumped 9% after trading in positive territory throughout the session while reaching a high of 14.11. The close was the highest of the year but fresh resistance at 14.50-15 held. Support has moved up to 13.50-12.50 and levels the bulls need to recover this week.
I have a Trade Alert for FLEX this morning as shares fell below another key level of support. This is currently our longest running trade that hasn’t recovered since shares traded to a 52-week high of $16.99 last month. This leaves us with two more April positions that still need to be addressed. It is always disappointing to have losing trades, especially for new subscribers that I have heard from, but please remember it is part of option trading.
I feel the pain on all winners and losers and the first quarter was absolutely amazing as we hit on 8 of 10 trades. I mentioned yesterday I have prepared us for this trading range, and possible pullback, so please stay patient. When a clearer trend emerges, and that could be as soon as this week or next, we will have a plethora of trades from my Watch List to go long or short with much better setups.
From desk to press, futures look like this: Dow (-26); S&P 500 (-2); Nasdaq 100 (-6).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 22-5 (81%). 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, $15.39, down $0.16)
STM May 15 calls (STM170519C00015000, $1.10, down $0.10)
Entry Price: $1.15 (3/31/2017)
Exit Target: $2.30
Stop Target: 55 cents
Action: Support is at $15.25-$15 with yesterday’s low reaching $15.38. Lowered resistance is at $15.50-$15.75.
Viavi Solutions (VIAV, $9.95, down $0.11)
VIAV May 12 calls (VIAV170519C00012000, $0.10, flat)
Entry Price: $0.29 (3/27/2017)
Exit Target: $0.60
Stop Target: None
VIAV April 11 calls (VIAV170421C00011000, $0.03, down $0.02)
Entry Price: $0.42 (3/20/2017)
Exit Target: $0.85
Stop Target: None
Action: Monday’s low tapped $9.84. Support is at $9.75. Resistance is at $10.25-$10.50.
Amicus Therapeutics (FOLD, $6.92, down $0.07)
FOLD April 8 calls (FOLD170421C00008000, $0.05, flat)
Entry Price: $0.60 (3/2/2017)
Exit Target: $1.20
Stop Target: None
Action: Support is at $6.75. Resistance is at $7-$7.25.
Flex (FLEX, $16.22, down $0.13)
FLEX April 17 calls (FLEX170421C00017000, $0.05, flat)
Entry Price: $0.35 (2/15/2017)
Exit Target: $0.70
Stop Target: None
Action: Support is at $16. Resistance is at $16.25-$16.50. Yesterday’s low reached $16.18. Earnings will be released later this month and after these options expire. This is a catalyst that could help shares rebound but let’s close the trade on the open to save the remaining premium.