MomentumOptions.com Pre-Market Update for 4/20/2017
March Lows in Play
The bulls were looking good for the first half of Wednesday’s action as upper resistance was tested. However, the second half fade to session lows led to a mixed session with the broader market pulling back but Tech and the small-caps closing slightly higher. The bears are still on the verge of causing chaos as the blue-chips fell below their late March intraday low.
The Dow tumbled 118 points, or 0.6%, to finish at 20,404. The blue-chips made a run to 20,546 with resistance at 20,600-20,650 easily holding. The fade to a session low of 20,379 into the closing bell split support at 20,400-20,350. The close below the previous March low of 20,412 was a bearish development and gets 20,200-20,000 in play if 20,350 cracks.
The S&P 500 slipped 4 points, or 0.2%, to end at 2,338. The index traded to a high of 2,352 but failed lower resistance at 2,360-2,370 shortly after the open. I mentioned backup support at 2,325-2,300 continues to a be a possibility if 2,335 fails to hold and was yesterday’s low.
The Nasdaq advanced 13 points, or 0.2%, to settle at 5,863. Tech made a morning journey north of 5,894 to push upper resistance at 5,875-5,900 but levels that held despite the bulls holding court all session. Support is at 5,825-5,800 on another move below 5,850.
The Russell 2000 climbed 5 point, or 0.4%, to close just under 1,367. The small-caps also held positive territory throughout Wednesday with the high checking in at 1,376. Upper resistance at 1,370-1,375 and the 50/100-day moving averages were cleared but also levels the bulls couldn’t nail down. Support is at 1,360-1,350.
The S&P 500 Volatility Index ($VIX, 14.93, up 0.51) cleared upper support at 13.50-12.50 after kissing 13.46 intraday. The late day surge and 10% rebound off the low tapped a high of 15.15. Resistance is at 17-17.
I have set a Stop Limit on VIAB to protect profits. I could also have a new index trade if the bears continue their attack on the March lows.
From desk to press, futures look like this: Dow (+6); S&P 500 (+1); Nasdaq 100 (+3).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 22-9 (71%). 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.
Viacom (VIAB, $44.31, up $0.22)
VIAB June 47.50 calls (VIAB170616C00047500, $0.75, up $0.10)
Entry Price: $0.55 (4/18/2017)
Exit Target: $1.10
Stop Target: 60 cents (Stop Limit)
Action: Set an initial Stop Limit at 60 cents to protect profits.
Resistance at $44.50-$44.75 was stretched following Wednesday’s run to $45. Rising support is at $44-$43.75.
Best Buy (BBY, $49.38, up $0.86)
BBY May 45 puts (BBY170519P00045000, $0.35, down $0.10)
Entry Price: $0.57 (4/13/2017)
Exit Target: $1.15
Stop Target: None
Action: Resistance at $49.50-$50. Rising support is at $49-$48.75.
STMicroelectronics (STM, $14.58, flat)
STM May 15 calls (STM170519C00015000, $0.60, flat)
Entry Price: $1.15 (3/31/2017)
Exit Target: $2.30
Stop Target: 40 cents (Stop Limit)
Action: Resistance is at $14.75-$15 and the 50-day moving average. Yesterday’s high reached $14.70. Support is at $14.50-$14.25.