MomentumOptions.com Pre-Market Update for 5/4/2017
Blue-Chips Hold Slight Gains/ Profit Alert (ORCL)
The bears controlled the majority of Wednesday’s action with the slight damage coming in Tech and the small-caps. The broader market showed some strength in the afternoon once the Fed minutes were released with the slight gains on the blue-chips holding into the closing bell. A tighter trading range seems to be developing but could widen as the rest of the week’s news unfolds.
The Dow gained 8 points, or 0.04%, to end at 20,957. The blue-chips were weak throughout the first half of action with the low reaching 20,874. Upper support at 20,800-20,700 held for the 7th-straight session. The rebound into positive territory reached 20,972 with resistance at 21,150-21,200 remaining a headache.
The S&P 500 slipped 3 points, or 0.1%, to settle at 2,388. The index traded in negative territory throughout the session with the low checking in at 2,379. Support at 2,375-2,370 held and I mentioned a close below 2,380 would be a bearish development. Resistance remains at 2,390-2,400.
The Nasdaq gave back 22 points, or 0.4%, to close at 6,072. Tech opened at 6,075 and traded down to 6,053 intraday. Shaky support at 6,050 held with backup help at 6,025-6,000 not tested. Lowered resistance is at 6,075-6,100.
The Russell 2000 declined 8 points, or 0.6%, to finish at 1,390. The small-caps also struggled throughout Wednesday after opening a quarter-point lower and kissing 1,386 during the morning action. Fresh support at 1,380-1,375 held with a close below the latter a bearish development. Resistance has moved down to at 1395-1,400.
The S&P 500 Volatility Index ($VIX, 10.68, up 0.09) tested a low of 10.40 but failed holding near-term support at 10.50-10. Resistance at 11.50 held on the intraday push to 11.15. There is risk to 12.50-13.50 on a move above this level.
I have updated the parameters for our IWM trade. We were stopped out of ORCL for a slight profit.
From desk to press, futures look like this: Dow (+54); S&P 500 (+6); Nasdaq 100 (+19).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 27-10 (73%). 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.
iShares Russell 2000 (IWM, $138.29, down $0.86)
IWM June 134 puts (IWM170616P00134000, $1.35, up $0.20)
Entry Price: $1.40 (5/2/2017)
Exit Target: $2.10-$2.80
Stop Target: 70 cents
Action: Set Exit Targets at $2.10-$2.80. Set a Stop Target at 70 cents.
Near-term support is at $138-$137.50 with yesterday’s low reaching $137.69. Resistance is at $138.50-$139.
STMicroelectronics (STM, $16.22, down $0.27)
STM July 17.50 calls (STM170721C00017500, $0.50, down $0.05)
Entry Price: $0.55 (5/2/2017)
Exit Target: $1.10
Stop Target: None
Action: Shares traded to a low of $16.10 on Wednesday with the close below upper support at $16.25-$16 a slightly bearish development. Resistance at $16.75-$17.
Oracle (ORCL, $44.89, down $0.24)
ORCL June 46 calls (ORCL170616C00046000, $0.57, down $0.08)
Entry Price: $0.55 (4/26/2017)
Exit Target: $1.10
Stop Target: 57 cents (Stop Limit)
Action: The Stop Limit at 57 cents tripped on yesterday’s pullback to $44.77 late in the session.
Cypress Semiconductor (CY, $13.29, down $0.04)
CY June 14 calls (CY170616C00014000, $0.40, flat)
Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Stop Target: 25 cents
Action: Yesterday’s high tapped $13.47 before the slightly lower close. Support is at $13.25-$13. Resistance is at $13.50.