MomentumOptions.com Pre-Market Update for 4/21/2017
Small-Caps Clear Major MA’s
The bulls made an opening statement on Thursday after facing fresh March lows ahead of the open and reminding Wall Street headlines don’t matter. Despite continued geopolitical risk and the uncertainty on how smooth an economic rebound might be in place, all-times highs are once again on the horizon. It is too early to say if the bears are rolling over and today’s action should provide better clues on if a rebound rally can last into next week, and possibly May.
The Dow zoomed 174 points, or 0.9%, to end at 20,578. The blue-chips opened two points higher at 20,406 and made a steady run to 20,629 ahead of Thursday’s close. Resistance at 20,600-20,650 held with a close above the latter leading to 20,800-20,900. Support remains at 20,400-20,350 with risk to 20,200-20,000 on a breech below the latter.
The S&P 500 soared 17 points, or 0.8%, to settle at 2,355. The index also held green throughout the session with the high reaching 2,361. Lower resistance at 2,360-2,370 held with the close above 2,350 a slightly bullish signal. Support is at 2,340-2,335 with a move below the latter getting 2,325-2,300 in play.
The Nasdaq jumped 53 points, or 0.9%, to close at 5,916. Tech cleared the 5,900 level midday while making a high of 5,926 during the second half of trading. Fresh resistance is at 5,925-5,950 followed with breakout potential to 5,975-6,000 and fresh all-time highs. Rising support is at 5,850-5,825 with move below 5,800 signaling another near-term top.
The Russell 2000 surged 17 points, or 1.2%, to finish at 1,384. The small-caps opened a point higher at 1,368 while making a steady push to close past upper resistance at 1,370-1,375 and the 50/100-day moving averages. This was a very bullish signal that gets 1,395-1,400 back in the mix. Support is trying to move up to 1,370-1,365.
The S&P 500 Volatility Index ($VIX, 14.15, down 0.78) traded in the red throughout Thursday’s action with the low tapping 13.83. Fresh support is at 13.50-12.50. Lowered resistance is at 14.50-15 and levels the bulls need to hold ahead of the weekend.
I have updated our current CY and SQ trades so let’s go check the tape.
From desk to press, futures look like this: Dow (+9); S&P 500 (+2); Nasdaq (+8).
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.
Cypress Semiconductor (CY, $14.09, up $0.32)
CY June 14 calls (CY170616C00014000, $0.90, up $0.15)
Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Stop Target: None
Action: Set an Exit Target at $1.70. There is no Stop Target.
Shares traded up to $14.12 yesterday. Resistance is at $14.25-$14.50. Support is at $13.75-$13.50 and the 50-day moving average.
Square (SQ, $17.71, up $0.51)
SQ June 18 calls (SQ170616C00018000, $1.00, up $0.10)
Entry Price: $0.95 (4/20/2017)
Exit Target: $1.90
Stop Target: None
Action: Set an Exit Target at $1.90. There is no Stop Target.
Shares traded up to fresh, lower resistance at $17.75-$18 yesterday. The 52-week peak is at $18.17 with a run to $19.50-$20 possible on short covering. Support is at $17.50-$17.25.
Viacom (VIAB, $44.33, up $0.02)
VIAB June 47.50 calls (VIAB170616C00047500, $0.75, flat)
Entry Price: $0.55 (4/18/2017)
Exit Target: $1.10
Stop Target: 60 cents (Stop Limit)
Action: Shares traded to a high of $44.76 on Thursday. Resistance is at $44.50-$44.75. Support is at $44-$43.75.
Best Buy (BBY, $50.53, up $1.15)
BBY May 45 puts (BBY170519P00045000, $0.20, down $0.15)
Entry Price: $0.57 (4/13/2017)
Exit Target: $1.15
Stop Target: None
Action: Fresh resistance at $50.50-$51 following yesterday’s fresh 52-week peak of $50.87. Rising support is at $50-$49.75.
STMicroelectronics (STM, $14.85 up $0.27)
STM May 15 calls (STM170519C00015000, $0.70, up $0.10)
Entry Price: $1.15 (3/31/2017)
Exit Target: $2.30
Stop Target: 40 cents (Stop Limit)
Action: Shares pushed a high of $14.91 on Thursday. Resistance is at $15-$15.25. Support is at $14.75-$14.50.