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

May Option Expiration Typically Bearish/ Profit Alert (IMAX)

12:05pm (EST)

The odds were favoring a down session as May option expiration day has been bearish in recent years and futures were slightly lower in overnight action. However, the bulls got some good earnings numbers ahead of the open and are pushing near-term resistance levels heading into the second half of trading.

We will have to wait for today’s action to settle before trying to figure out next week’s short-term clues but I’ve already started my weekend homework. There are a numbers of sectors I will be looking at to see how much damage was done on a technical level, and of course, I will be hunting for fresh trades.

My initial outlook following Wednesday’s pullback was that the rest of May could stay choppy with a rebound rally starting in June. This assumed, no further technical damage was done, or if there was, backup support levels would hold. They did on Thursday’s opening bell, and while I would love to see a return to fresh highs, quickly, it would be a healthier sign for the market if there is some consolidation over the next week or two.

The good news is the portfolio has been on a roll since late March as we have closed 10 out of the last 11 trades for winners. Although some of the current trades are down, I still like them, as long as support levels hold. With the IMAX trade winding down, there will be plenty of room to add a number of short-term trades as the portfolio will be light.

Heading into the second half of action, the Dow is higher by 117 points to 20,780 while the S&P 500 is up 16 points to 2,382. The Nasdaq is adding 41 points to 6,096 and the Russell 2000 is gaining 6 points to 1,367.

It is still too early to get aggressively long and I mentioned there are some names I like as bearish trades. I do have a Profit Alert on IMAX ahead of the weekend as I want to lock-in this 200% triple-digit winner. I could also take action on a New Trade into the close, so stay locked-and-loaded. If you don’t hear from me again, I will be back with a full update on Monday. Until then, have a great and safe weekend.

 

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, $16.58, up $0.48)

FLEX July 17 calls (FLEX170721C00017000, $0.45, up $0.15)

Entry Price: $0.45 (5/16/2017)
Exit Target: $0.90
Return: 0%
Stop Target: None

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

 

STMicroelectronics (STM, $16.46, up $0.28)

STM October 20 calls (STM171020C00020000, $0.60, up $0.05)

Entry Price: $0.70 (5/15/2017)
Exit Target: $1.40
Return: -14%
Stop Target: None

 

STM July 17.50 calls (STM170721C00017500, $0.55, up $0.10)

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

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

 

Imax (IMAX, $27.28, up $0.18)

IMAX June 28 puts (IMAX170616P00028000, $1.20, down $0.10)

Entry Price: $0.40 (5/12/2017)
Exit Target: $1.75 (closed half at $1.20 on 5/17/2017)
Return: 200%
Stop Target: $1.10 (Stop Limit)

Action: Close the other half of the trade at current levels.

 

Viavi Solutions (VIAV, $10.96, up $0.01)

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 on continued closes above $11. Support is at $10.75.

 

Cypress Semiconductor (CY, $13.21, up $0.08)

CY June 14 calls (CY170616C00014000, $0.25, flat)

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

Action: Resistance is at $13.25-$13.50. Support is at $12.75-$12.50.