MomentumOptions.com Pre-Market Update for 5/17/2017
Tech Stays White Hot
The bulls once again pushed all-times highs on Tuesday but had trouble holding the majority of the gains as the market finished mixed. The bears weren’t a threat but remain an unwanted guest as they continue to hold the blue-chips and small-caps hostage. The action is still favoring the bulls but an ambush attack by the bears can’t be ruled out given the market nervousness.
The Dow dipped 2 points, or 0.01%, to settle at 20,979. The blue-chips cleared upper resistance at 20,975-21,000 shortly after the open on the run to 21,033 but a level that failed to hold. Continued closes above the latter gets 21,150-21,200 in play. Support at 20,800-20,700 easily held on the intraday backtest to 20,932.
The S&P 500 slipped over a point, or 0.1%, to close 2,400. The index opened higher north of 2,404 while reaching a fresh all-time intraday high of 2,405.77. Upper resistance at 2,400-2,405 was stretched but held with rom to run to 2,425-2,430 on continued closes above the latter. Support remains at 2,390-2,385 with Tuesday’s low reaching 2,396.
The Nasdaq added 20 points, or 0.3%, to finish at 6,169. Tech traded down to 6,139 during the first half weakness after opening at a record high of 6,160. Key support at 6,150 is trying to hold with backup at 6,125-6,100. A future close below 6,075 will be a signal to possibly go short. Upper resistance and my near-term fluff targets of 6,150-6,175 were tested following the rebound to a second half intraday high of 6,170.
The Russell 2000 gained a point, or 0.1%, to end at 1,395. The small-caps opened a point higher just south of 1,395 while reaching a peak of 1,396 shortly afterwards. Upper resistance at 1395-1,400 continues to be a trouble spot. Support at 1,380-1,375 easily held on the fade to 1,384 with a close below the latter being a bearish development.
The S&P 500 Volatility Index ($VIX, 10.65, up 0.23) traded between 10.67-10.18. Resistance is at 10.50-11.50. Support is at 10-9.50.
I have updated the parameters of the FLEX and STM trades from yesterday.
From desk to press, futures look like this: Dow (-107); S&P 500 (-13); Nasdaq 100 (-31).
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, $16.71, up $0.43)
FLEX July 17 calls (FLEX170721C00017000, $0.53, up $0.17)
Entry Price: $0.45 (5/16/2017)
Exit Target: $0.90
Stop Target: None
Action: Set an Exit Target at 90 cents. There is no Stop Target.
Shares traded to a high of $16.79 yesterday. Resistance is at $16.75-$17 and the 52-week high of $16.99. Support is at $16.25-$16.
STMicroelectronics (STM, $17.15, up $0.26)
STM October 20 calls (STM171020C00020000, $0.70, up $0.05)
Entry Price: $0.70 (5/15/2017)
Exit Target: $1.40
Stop Target: None
STM July 17.50 calls (STM170721C00017500, $0.70, up $0.05)
Entry Price: $0.65 (5/15/2017)
Exit Target: $1.30
Stop Target: None
Action: Set an Exit Target at $1.40 for the STM October 20 calls. There is no Stop Target.
The close above lower resistance at $17-$17.25 was bullish with yesterday’s intraday 52-week peak reaching $17.16. Rising support is at $16.75-$16.50. Continued closes above $17 could carry shares toward $18-$20.
Imax (IMAX, $27.60, down $0.30)
IMAX June 28 puts (IMAX170616P00028000, $1.00, up $0.05)
Entry Price: $0.40 (5/12/2017)
Exit Target: $1.10 (Limit Order on half)
Stop Target: 80 cents (Stop Limit)
Action: Shares traded up to $28.30 yesterday, before fading, with the puts trading down to 81 cents.
Support is at $27.75-$27.50. Resistance is at $28.25-$28.50.
Viavi Solutions (VIAV, $11.50, down $0.09)
June 12 calls (VIAV170616C00022500, $0.30, down $0.05)
Entry Price: $0.35 (5/5/2017)
Exit Target: $0.70-$1.05
Stop Target: None
Action: Upper support at $11.50-$11.25 was breeched following Tuesday’s backtest to $11.38. Resistance is at $11.75-$12 on a move back above $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, $138.63, up $0.05)
IWM June 134 puts (IWM170616P00134000, $0.85, down $0.10)
Entry Price: $1.40 (5/2/2017)
Exit Target: $2.10-$2.80
Stop Target: 70 cents (Stop Limit)
Action: Support is at $138-$137.50 with yesterday’s low tapping $137.62. Resistance is at $139-$139.50.
Cypress Semiconductor (CY, $13.85, up $0.21)
CY June 14 calls (CY170616C00014000, $0.50, up $0.05)
Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Stop Target: 25 cents
Action: Tuesday’s trip to $13.92 cleared cleated lower resistance at $13.75-$14. Support is at $13.50-$13.25.