MomentumOptions.com Pre-Market Update for 5/19/2017

VIX Settles Below 15

8:00am (EST)

I often say one day doesn’t make a trend and Thursday’s market gains made Wall Street feel somewhat better following Wednesday’s drubbing. Although the bears are easily winning the week, and the month for the most part, Tech is still showing strength. Today’s action could go a long way in determining how next week shakes out as long as volatility stays below 15.

The Dow gained 56 points, or 0.2%, to finish at 20,663. The blue-chips traded down to 20,553 shortly the after open with support at 20,500-20,450 and the 100-day moving average holding. Resistance at 20,700-20,800 was split following the run to 20,759 but levels that failed to hold.

The S&P 500 added 8 points, or 0.4%, to end 2,365. The index tested a low of 2,352 in the opening minutes with upper support is at 2,350-2,325 and the 100-day moving average holding. Upper resistance at 2,370-2,375 was cleared by three-quarters of a point but levels that also failed to hold into the closing bell.

The Nasdaq climbed 43 points, or 0.7%, to settle at 6,055. Tech opened below the 6,000 level at 5,998 and tapped 5,996 before quickly recovering and holding green for the rest of the session. Support is at 5,975-5,950 and the 50-day moving average easily held before the rebound to 6,073. Upper hurdles at 6,050-6,075 were tested and the close above lower resistance was slightly bullish.

The Russell 2000 rose 5 points, or 0.4%, to close at 1,361. The small-caps made a quick backtest to 1,351 at the start of trading with upper support at 1,350-1,340 standing strong. Resistance at 1370-1,375 came into play on the run to 1,365 late in the session.

The S&P 500 Volatility Index ($VIX, 14.66, down 0.93) peaked at 16.30 during the morning weakness to split resistance at 16-16.50 but levels that held. The low reached 14.03 shortly afterwards and the close below upper support at 15-14.50 was slightly bullish. However, I would like to see a recovery into the 13.50-12.50 zone ahead of the weekend, or early next week, to ensure volatility has settled.

I could have a new bearish trade this morning on a stock setting fresh 52-week lows.

From desk to press, futures look like this: Dow (-12); S&P 500 (-1); Nasdaq 100 (-4).

 

Momentum Options Play List

Closed Momentum Options Trades for 2017: 31-10 (76%). 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, $16.10 down $0.12)

FLEX July 17 calls (FLEX170721C00017000, $0.30, down $0.05)

Entry Price: $0.45 (5/16/2017)
Exit Target: $0.90
Return: -33%
Stop Target: None

Action: Support is at $16-$15.75 with yesterday’s low reaching $15.98. Lowered resistance is at $16.25-$16.50.

 

STMicroelectronics (STM, $16.18, up $0.09)

STM October 20 calls (STM171020C00020000, $0.55, up $0.05)

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

 

STM July 17.50 calls (STM170721C00017500, $0.45, flat)

Entry Price: $0.65 (5/15/2017)
Exit Target: $1.30
Return: -31%
Stop Target: None

Action: Resistance is at $16.25-$16.50 with Thursday’s high reaching $16.28. Support is at $15.75-$15.50 and the 50-day moving average if $16 fails to hold.

 

Imax (IMAX, $27.10, flat)

IMAX June 28 puts (IMAX170616P00028000, $1.30, down $0.10)

Entry Price: $0.40 (5/12/2017)
Exit Target: $1.75 (closed half at $1.20 on 5/17/2017)
Return: 212%
Stop Target: $1.10 (Stop Limit)

Action: Shares tested a low of $26.81 yesterday with the puts kissing a low of $1.15. Support is at $27-$26.75. Resistance is at $27.25-$27.50.

 

Viavi Solutions (VIAV, $10.95, up $0.05)

June 12 calls (VIAV170616C00022500, $0.15, flat)

Entry Price: $0.35 (5/5/2017)
Exit Target: $0.70-$1.05
Return: -57%
Stop Target: None

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

 
Cypress Semiconductor (CY, $13.13, up $0.34)

CY June 14 calls (CY170616C00014000, $0.25, up $0.05)

Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Return: -71%
Stop Target: None

Action: Resistance is at $13.25-$13.50 with Thursday’s high reaching $13.17. Support is at $12.75-$12.50.