MomentumOptions.com Pre-Market Update for 4/27/2017
Market Slips Into Closing Bell
The bulls nearly got a hat trick on Wednesday but were denied a 3-session win streak into the final hour of trading. The losses were minimal following a tight trading range of less than 100 points on the Dow with volatility staying subdued. These were good signs and showed normal consolidation following the two-day surge to start the week. However, I would like to see higher highs into Friday, or a settling above fresh support ahead of the weekend on any pullbacks.
The Dow dipped 21 points, or 0.1%, to end at 20,975. The blue-chips made a run to 21,070 while topping Tuesday’s peak at 21,026. Resistance remains at 21,150-21,200 with the all-time high at 21,169. A move above the latter opens up fluff to 21,400-21,450. Support at 20,800-20,700 held on the late day fade to 20,972.
The S&P 500 slipped a point, or 0.1%, to settle at 2,387. The index tested a high of 2,398 shortly after Wednesday’s open with upper resistance at 2,390-2,400 holding. Continued closes above the latter gets record highs and fresh resistance at 2,425-4,250 in play. Near-term support remains at 2,370-2,365.
The Nasdaq gave back a quarter-point, or 0.0%, to close at 6,025. Tech traded to its lowest point of 6,021 during the first half of action with rising support at 6,000-5,950 holding. A move below 5,900 would likely signal a short-term top. The second half push to 6,040 set a new all-time intraday peak with fresh resistance and fluff at 6,075-6,100 still in play.
The Russell 2000 advanced 8 points, or 0.6%, to finish at 1,419. The small-caps slipped two points on the open to 1,409 with newly minted support at 1,400-1,395 standing strong. Upper resistance and my near-term fluff targets of 1,415-1,425 were tested and cleared following the intraday climb to 1,425.70. Continued closes above the latter gets 1,440-1,445 on the board.
The S&P 500 Volatility Index ($VIX, 10.85, up 0.09) reached its peak at 10.89 ahead of Wall Street’s lunch break with near-term resistance at 11.50 holding for the second-straight session. Additional hurdles are at 12.50-13.50. Upper support at 10.50-10 was breeched but held on the trip to 10.39 during the last 30 minutes of trading.
I have updated the parameters of our ORCL trade and I set an initial Stop Limit on SNAP. I’m still looking to add bullish call options on continued momentum although I do have plenty of bearish trades I’m still tracking.
From desk to press, futures look like this: Dow (+15); S&P 500 (+2); Nasdaq 100 (+4).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 24-10 (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.
Oracle (ORCL, $44.69, down $0.03)
ORCL June 46 calls (ORCL170616C00046000, $0.55, up $0.07)
Entry Price: $0.55 (4/26/2017)
Exit Target: $1.10
Stop Target: None
Action: Set an Exit Target at $1.10. There is no Stop Target.
Resistance is at $44.75-$45 with Wednesday’s high tapping $45.04. Support is at $44.50-$44.25.
Cisco Systems (CSCO, $33.40, down $0.02)
CSCO May 34 calls (CSCO170519C00034000, $0.42, down $0.01)
Entry Price: $0.42 (4/25/2017)
Exit Target: $0.85
Stop Target: None
Action: Resistance is at $33.50-$33.75. Yesterday’s high reached $33.63. Support is at $33.25-$33.
Snap (SNAP, $21.58, up $0.24)
SNAP May 23 calls (SNAP170519C00023000, $0.95, up $0.10)
Entry Price: $0.75 (4/21/2017)
Exit Target: $1.50
Stop Target: 77 cents (Stop Limit)
Action: Set an initial Stop Limit at 77 cents. Yesterday’s low on the calls checked-in at 80 cents.
Shares closed below lower resistance at $21.50-$21.75 following Wednesday’s trip to $21.65. Rising support is at $21.25-$21. Volume was heavy yesterday and is still indicating traders are expecting a higher stock price in the coming weeks. If our Stop Limit trips this week without us gaining additional profits, I will target June options for a possible reentry point.
Cypress Semiconductor (CY, $13.98, down $0.26)
CY June 14 calls (CY170616C00014000, $0.85, down $0.10)
Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Stop Target: None
Action: Support is at $13.75-$13.50 with yesterday’s bottom reaching $13.88. Resistance is at $14-$14.25.
Square (SQ, $18.08, down $0.14)
SQ June 18 calls (SQ170616C00018000, $1.20, down $0.05)
Entry Price: $0.95 (4/20/2017)
Exit Target: $1.90
Stop Target: $1.05 (Stop Limit)
Action: Wednesday’s low reached $17.92. Support is at $18-$17.75. Resistance is at $18.25-$18.50.