Mid-Market Update/ New Trade (FLEX) for 5/16/2017

Earnings for the Week/ New Trade (FLEX)

12:00pm (EST)

The bulls are trying to show some follow through today following a higher open and their quest for higher highs. The action has favoring the bears slightly, but not much damage is being done as near-term support levels are easily holding.

With earnings season starting to wind down, the attention will start to focus more on economic, and possible geopolitical news, into month end and June. July will mark the start of second quarter earnings season but there will be notable companies still reporting earnings over the next 6-8 weeks.

The opportunity for earnings trades will also be there as Wall Street usually forgets to focus on the smaller companies once the bigger fireworks are over. Earnings trades are still tricky but provide some of the best option returns as stocks tend to make their biggest price swings on the announcements.

As far as this week’s action, the candidates aren’t my favorite but lets’s cover the list.

After today’s closing bell, NetList (NLST), Jack in the Box (JACK), Red Robin Gourmet Burgers (RRGB) and Urban Outfitters (URBN) will report earnings.

American Eagle Outfitters (AEO), Cisco Systems (CSCO), L Brands (LB) and Target (TGT) highlight Wednesday’s action.

For Thursday, Alibaba (BABA), Applied Materials (AMAT), Autodesk (ADSK), Gap (GPS), Ralph Lauren (RL), Ross (ROSS) and Salesforce (CRM) will announce their quarterly results.

And finally, ahead of Friday’s opening bell, Campbell Soup (CPB), Deere & Company (DE) and Foot Locker (FL) will confess their numbers.

Out of the aforementioned group, I’m currently researching and doing the homework for a possible trade in AMAT.

Turning our attention to the indexes, the Dow is lower by 11 points to 20,970 while the S&P 500 is off 2 points to 2,399. The Nasdaq is up 3 points to 6,153 and the Russell 2000 is sliding 7 points to 1,386.

I have updated our current trades, and I have a New Trade on FLEX I want to get us into. Once again, stay locked-and-loaded into the close in case I take additional action.


Momentum Options Play List

Closed Momentum Options Trades for 2017: 29-10 (74%). 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.


New Trade

Flex (FLEX, $16.50, up $0.22)

Buy to Open FLEX July 17 calls (FLEX170721C00017000, $0.45, up $0.09)

Action: I like these call options at current levels and you can use a Limit Order up to 60 cents to get the best fills. These are the FLEX July 17 call options that expire on July 21st, 2017. I will provide the parameters of the trade in tomorrow’s Pre-Market update.


Current Trades

STMicroelectronics (STM, $17.01, up $0.12)

STM July 17.50 calls (STM170721C00017500, $0.70, up $0.05)

Entry Price: $0.65 (5/15/2017)
Exit Target: $1.30
Return: 8%
Stop Target: None

Action: Resistance is at $17-$17.25. Support is at $16.50-$16.25. Continued closes above $17 could carry shares toward $18-$20.


Imax (IMAX, $27.92, up $0.02)

IMAX June 28 puts (IMAX170616P00028000, $0.90, down $0.05)

Entry Price: $0.40 (5/12/2017)
Exit Target: $1.10 (Limit Order on half)
Return: 125%
Stop Target: 80 cents (Stop Limit)

Action: Support is at $27.75-$27.50. Resistance is at $28.25-$28.50.


Viavi Solutions (VIAV, $11.42, down $0.17)

June 12 calls (VIAV170616C00022500, $0.30, down $0.05)

Entry Price: $0.35 (5/5/2017)
Exit Target: $0.70-$1.05
Return: -14%
Stop Target: None

Action: Support is at $11.50-$11.25. Resistance is at $11.75-$12.

You can read my detailed writeup along with my thoughts on the 10-year chart in the 5/15/17 Pre-Market update.


iShares Russell 2000 (IWM, $138.02, down $0.56)

IWM June 134 puts (IWM170616P00134000, $1.00, up $0.05)

Entry Price: $1.40 (5/2/2017)
Exit Target: $2.10-$2.80
Return: -29%
Stop Target: 70 cents (Stop Limit)

Action: Fresh support is at $138-$137.50. Resistance at $139-$139.50.


Cypress Semiconductor (CY, $13.71, up $0.07)

CY June 14 calls (CY170616C00014000, $0.40, flat)

Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Return: -53%
Stop Target: 25 cents

Action: Resistance is at $13.75-$14. Support is at $13.50-$13.25.