MomentumOptions.com Pre-Market Update for 4/26/2017
Dow/ S&P 500 Still Seeking Fresh Highs
The bulls had their best back-to-back sessions since early November following Tuesday’s continued market gains. Tech and the small-caps led the way higher, again, after setting fresh record highs, but the Dow and S&P 500 are also within a stone’s throw of tripping their all-time peaks. The action will likely remain heavy again today with more corporate earnings and a tax bill proposal in play.
The Dow zoomed 232 points, or 1.1%, to finish at 20,996. The blue-chips gapped higher on the open for the second-straight session after opening at 20,915 and peaking at 21,026. Fresh resistance is at 21,150-21,200 with the all-time high at 21,169. A close above these levels opens up blue-sky territory to 21,400-21,450. Support has moved up to 20,800-20,700.
The S&P 500 added 14 points, or 0.6%, to end at 2,388. The index opened above the 2,380 level at 2,381 while tapping a intraday high of 2,392. The close above lower resistance at 2,390-2,400 was bullish with fresh lifetime highs coming on a point above the latter. If cleared, a run to 2,425-4,250 could come over the near-term. Rising support is at 2,370-2,365.
The Nasdaq jumped 41 points, or 0.7%, to settle at 6,025. Tech opened above the 6,000 level at 6,002 while reaching a late session all-time high of 6,036. I have talked about fluff and near-term resistance to 6,075-6,100 on continued closes above 6,000. Rising support is at 5,950-5,900 on a backtest.
The Russell 2000 climbed 13 points, or 0.9%, to close at 1,411. The small-caps opened above the 1,400 level by a tenth point while reaching its record high of 1,415 shortly afterwards. Lower resistance at 1,415-1,425 held with a close above the latter getting 1,440-1,445 in the mix. Fresh support is at 1,400-1,395 with a move below 1,385 likely signaling a short-term top.
The S&P 500 Volatility Index ($VIX, 10.76, down 0.08) tested a high of 11.15 shortly after the open with near-term resistance at 11.50 holding. Additional hurdles are at 12.50-13.50. Support at 10.50-10 was split following the intraday dip to 10.22.
I have updated the parameters for our latest CSCO trade. I have also set and adjusted a couple of Stop Targets/ Stop Limits (SQ, STM) so please make the adjustments in your brokerage accounts, accordingly.
From desk to press, futures look like this: Dow (+10); S&P 500 (+1); Nasdaq 100 (+3).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 23-10 (70%). 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.
Cisco Systems (CSCO, $33.42, up $0.14)
CSCO May 34 calls (CSCO170519C00034000, $0.43, up $0.05)
Entry Price: $0.42 (4/25/2017)
Exit Target: $0.85
Stop Target: None
Action: Set an Exit Target at 85 cents. There is no Stop Target.
Shares traded up to $33.52 yesterday to close right on their 50-day moving average. Resistance is at $33.50-$33.75 with a close above the latter a bullish development. Support is at $33.25-$33.
Snap (SNAP, $21.34, up $0.14)
SNAP May 23 calls (SNAP170519C00023000, $0.85, up $0.05)
Entry Price: $0.75 (4/21/2017)
Exit Target: $1.50
Stop Target: None
Action: Resistance is at $21.25-$21.50. Support is at $20.75-$20.50. Yesterday’s low touched $20.56 before the late day run to $21.40.
Cypress Semiconductor (CY, $14.24, up $0.16)
CY June 14 calls (CY170616C00014000, $0.95, up $0.05)
Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Stop Target: None
Action: Shares traded to a high of $14.38 on Tuesday. Resistance is at $14.25-$14.50. Support is at $13.75-$13.50.
Square (SQ, $18.22, up $0.37)
SQ June 18 calls (SQ170616C00018000, $1.25, up $0.20)
Entry Price: $0.95 (4/20/2017)
Exit Target: $1.90
Stop Target: $1.05
Action: Set an initial Stop Limit at $1.05 to protect profits.
Shares kissed a fresh 52-week high of $18.30 yesterday. Fresh resistance is at $18.25-$18.50. Support has moved up to $18-$17.75.
STMicroelectronics (STM, $16.09, up $0.65)
STM May 15 calls (STM170519C00015000, $1.45, up $0.45)
Entry Price: $1.15 (3/31/2017)
Exit Target: $2.30
Stop Target: 40 cents, raise to $1.20 (Stop Limit)
Action: Raise the Stop Limit from 40 cents to $1.20 to protect profits.
Fresh resistance is at $16.25-$16.50 following yesterday’s 52-week high of $16.14. Rising support is at $15.75-$15.50.