MomentumOptions.com Mid-Market Update for 5/17/2017

Support Back In Play/ Profit Alert (IMAX)

1:15pm (EST)

I mentioned this morning the bears were due for an ambush and today’s pullback has major support levels in play. The talking heads are blaming it on political news and claims that President Trump previously asked FBI director, James Comey, to end a probe into the president’s former national security adviser, Michael Flynn.

Their reasoning on today’s slide is the current circus will sidetrack the administration from achieving its goals on tax and healthcare reform. Of course, the media wants things done tomorrow but it’s too early to say how overblown, or serious, today’s news really is.

I rely more on technical indicators than headlines and targeted possible bearish trades in the iPath S&P 500 VIX Futures (VXX) and the PowerShares QQQ ETF (QQQ) this week. I didn’t take action this morning as puts option premiums were juiced on the open but I still might take action in one or both of these names, depending how the close goes.

Today’s nastiness has put the major indexes in the red for the month, excluding Tech, which held a key level of support during the first half of action. We are already short the small-caps and I like the QQQ’s if 6,050 fails on the Nasdaq. Today’s low has reached 6,052.

The Dow is tanking 253 points to 20,736 while the S&P 500 is falling 26 points to 2,374. The Nasdaq is down 97 points to 6,072 and the Russell 2000 is getting hit for 30 points to 1,364.

I have a Profit Alert for IMAX as the Limit Order on half the trade triggered on the open. I have also set a Limit Order on half the IWM trade.

 

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.

 

Flex (FLEX, $16.31, down $0.40)

FLEX July 17 calls (FLEX170721C00017000, $0.38, down $0.15)

Entry Price: $0.45 (5/16/2017)
Exit Target: $0.90
Return: -16%
Stop Target: None

Action: Support is at $16.25-$16. Resistance is at $16.50-$16.75.

 

STMicroelectronics (STM, $16.38, down $0.77)

STM October 20 calls (STM171020C00020000, $0.55, down $0.15)

Entry Price: $0.70 (5/15/2017)
Exit Target: $1.40
Return: -21%
Stop Target: None

 

STM July 17.50 calls (STM170721C00017500, $0.50, down $0.20)

Entry Price: $0.65 (5/15/2017)
Exit Target: $1.30
Return: -23%
Stop Target: None

Action: Resistance is at $16.50-$16.75. Support is at $16.25-$16.

 

Imax (IMAX, $27.20, down $0.40)

IMAX June 28 puts (IMAX170616P00028000, $1.40, up $0.40)

Entry Price: $0.40 (5/12/2017)
Exit Target: $1.10, raise to $1.75 (closed half at $1.20 on 5/17/2017)
Return: 225%
Stop Target: 80 cents, raise to $1.10 (Stop Limit)

Action: Raise the Exit Target from $1.10 to $1.75. Raise the Stop Limit from 80 cents to $1.10.

The calls opened at $1.20 and have traded to a high of $1.45. Half the trade closed at $1.20 on the Limit Order. Fresh support is at $27-$26.75. Resistance is at $27.50-$27.75.

 

Viavi Solutions (VIAV, $11.12, down $0.38)

June 12 calls (VIAV170616C00022500, $0.18, down $0.12)

Entry Price: $0.35 (5/5/2017)
Exit Target: $0.70-$1.05
Return: -49%
Stop Target: None

Action: Support is at $11-$10.75. Resistance is at $11.25-$11.50.

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, $135.80, down $2.83)

IWM June 134 puts (IWM170616P00134000, $1.80, up $0.95)

Entry Price: $1.40 (5/2/2017)
Exit Target: $2.10-$2.80 (Limit Order on half at $2.10)
Return: 32%
Stop Target: 70 cents (Stop Limit)

Action: Set a Limit Order to close half the trade at $2.10.

Fresh support is at $135.50-$135. Resistance is at $136.50-$137.

 

Cypress Semiconductor (CY, $13.25, down $0.60)

CY June 14 calls (CY170616C00014000, $0.30, down $0.20)

Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Return: -65%
Stop Target: 25 cents

Action: Support is at $13.25-$13. Resistance is at $13.50.