MomentumOptions.com Pre-Market Update for 5/2/2017
Dow’s Monday Win Steak Snapped/ Profit Alert (SNAP)
Tech continues to grab the headlines after setting another fresh record high on Monday. However, the pullback in the blue-chips ended the Dow’s three-straight up sessions to start the week. The damage was minimal and may have represented some caution ahead of another big week for earnings.
The Dow declined 27 points, or 0.1%, to finish at 20,913. The blue-chips tested a high of 20,976 intraday with resistance at 21,150-21,200 holding for the fifth-straight session. Support at 20,800-20,700 and the 50-day moving average held on the midday fade to 20,898.
The S&P 500 added 4 points, or 0.2%, to end at 2,388. The index held positive territory throughout Monday with the high tapping north of 2,394. Resistance at 2,390-2,400 was split with room to run up to 2,425-2,450 on continued closes above the latter. Near-term support remains at 2,375-2,370.
The Nasdaq jumped 44 points, or 0.7%, to settle at 6,091. Tech also had a clean screen throughout Monday after reaching a fresh all-time peak of 6,100.73. The move above upper resistance at 6,075-6,100 opens up fluff to 6,200-6,225 over the near-term. Rising support is now at 6,025-6,000 with a move below 5,975-5,950 warning signs of a possible top.
The Russell 2000 advanced nearly 7 points, or 0.5%, to close at 1,407. The small-caps traded down to 1,397 shortly after the open with lower support at 1,400-1,395 holding. Resistance remains at 1,425 and the record high with yesterday’s peak reaching 1,411.
The S&P 500 Volatility Index ($VIX, 10.11, down 0.71) collapsed another 6% following an opening pop to 11.04. Near-term resistance at 11.50 held for the fifth-straight session and a level we can watch to go long, if breeched. Lower support at 10.50-10 held into the closing bell following the fresh 52-week low of 9.90. There is the chance of 9.50-9 coming into play on continued closes below 10.
I have a Profit Alert for SNAP following yesterday’s pullback. I could have a New Trade on a familiar stock shortly after the open so stay locked-and-loaded.
From desk to press, futures look like this: Dow (-7); S&P 500 (-1); Nasdaq 100 (+2).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 25-10 (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, $45.05, up $0.09)
ORCL June 46 calls (ORCL170616C00046000, $0.60, flat)
Entry Price: $0.55 (4/26/2017)
Exit Target: $1.10
Stop Target: None
Action: Resistance is at $45-$45.50 with Monday’s high touching $45.18. Support is at $44.50-$44.25.
Snap (SNAP, $22.21, down $0.34)
SNAP May 23 calls (SNAP170519C00023000, $1.25, down $0.20)
Entry Price: $0.75 (4/21/2017)
Exit Target: $2 (Limit Order on half)
Stop Target: $1.20 (Stop Limit)
Action: The Stop Limit from at $1.20 tripped on yesterday’s backtest to $22.11. I will keep SNAP on my Watch List as I’m sure we will be back to play the name again.
Cypress Semiconductor (CY, $13.80, down $0.21)
CY June 14 calls (CY170616C00014000, $0.60, down $0.10)
Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Stop Target: None
Action: Support at $13.75 and the 50-day moving average. Resistance is at $14.
Square (SQ, $18.61, up $0.37)
SQ June 18 calls (SQ170616C00018000, $1.50, up $0.25)
Entry Price: $0.95 (4/20/2017)
Exit Target: $1.90 (closed half at $1.20 on 4/28/2017)
Stop Target: $1.05 (Stop Limit)
Action: Fresh resistance is at $18.75-$19 following yesterday’s 52-week high of $18.80. Rising support is at $18.50-$18.25.