MomentumOptions.com Pre-Market Update for 5/23/2017
VIX Settles Below 11.50
8:00am (EST)
The bulls continued their rebound off last week’s lows as Monday’s gains reclaimed prior support levels and has possible fresh all-time highs back in play. Of course, there are still a number of obstacles that need clearing but volatility continued to ease and closed back below the 11.50 level.
The Dow gained 90 points, or 0.4%, to settle at 20,894. The blue-chips traded in positive territory for the second-straight session while reaching a high of 20,914. Fresh resistance is at 20,950-21,000 with a move above the latter a bullish development. Support is at 20,800-20,700 with a close below 20,600 a bearish development.
The S&P 500 advanced 12 points, or 0.5%, to close 2,394. The index traded to a high of 2,395 with lower resistance at 2,390-2,400 holding into the closing bell. The recent all-time high is at 2,405.77 with fluff to 2,420-2,425, if cleared. Support is trying to move up to 2,380-2,375 with a move below 2,370 a warning sign.
The Nasdaq surged 50 points, or 0.8%, to finish at 6,133. Tech opened just below the 6,100 level at 6,097 while making a steady run past 6,135 into the final minutes of trading on Monday. Fresh resistance is at 6,150-6,175 with the lifetime high at 6,170. A close above the latter gets 6,225-6,250 in the mix. Fresh support is at 6,100-6,075 with a move below 6,050 a momentum killer.
The Russell 2000 climbed nearly 10 points, or 0.7%, to end at 1,377. The small-caps also held positive territory for the second-straight session while clearing upper resistance at 1370-1,375 on the push to 1,378 intraday. The bulls still need to clear 1,380 to keep momentum going and for a run at 1,390-1,400 again. Near-term support has moved up to 1,365-1,360.
The S&P 500 Volatility Index ($VIX, 10.89, down 1.12) opened higher at 12.29 and traded up to 12.52 on Monday’s open. Fresh resistance at 12.50-13.50 easily held before the steady fade to the session low into the closing bell. I mentioned the bulls needed to hold 11.50 for several sessions and yesterday was a good start. Fresh support is at 10.50-10.
I have updated our two latest bullish trades, GLD and FOLD, along with their charts and my thoughts. I still have room for fresh trades, and a possible add-on with FLEX, so stay locked-and-loaded after the open in case I take action ahead of the Mid-Market update.
From desk to press, futures look like this: Dow (-24); S&P 500 (-4); Nasdaq 100 (-8).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 32-10 (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.
Amicus Therapeutics (FOLD, $8.41, up $0.64)
FOLD July 8 calls (FOLD170721C00008000, $1.00, up $0.25)
Entry Price: $0.85 (5/22/2017)
Exit Target: $1.70-$2.55
Return: 18%
Stop Target: None
Action: Set an Exit Targets at $1.70-$2.55. There is no Stop Target.
I was watching shares throughout Monday and wanted to get into call options on the move above $8 and run to $8.43. The near-term chart shows a clear breakout with fresh resistance at $8.50-$9. The 52-week high is at $9.61. A run to $9.50-$10 by mid-July will move these options to $1.50-$2 “in-the-money”. Fresh support is at $8-$7.75.
Spider Gold Shares (GLD, $119.90, up $0.50)
GLD June 122 calls (GLD170616C00122000, $0.70, up $0.07)
Entry Price: $0.75 (5/22/2017)
Exit Target: $1.50
Return: -7%
Stop Target: None
Action: Set an Exit Target at $1.70. There is no Stop Target.
Shares traded to a high of $120.14 on Monday to clear upper resistance at $119.50-$120. Continued closes above the latter could lead to a run towards $122-$123. Support is at $119-$118.75.
Flex (FLEX, $16.83, up $0.32)
FLEX July 17 calls (FLEX170721C00017000, $0.60, up $0.10)
Entry Price: $0.45 (5/16/2017)
Exit Target: $0.90
Return: 33%
Stop Target: None
Action: Monday’s peak reached $16.86 and the 52-week peak is at $16.99. Fresh resistance is at $17-$17.25. Support is at $16.50-$16.25.
Special Notice: I could “piggy-back” this trade if shares clear $17 with additional July call options.
STMicroelectronics (STM, $16.28, down $0.09)
STM October 20 calls (STM171020C00020000, $0.50, down $0.05)
Entry Price: $0.70 (5/15/2017)
Exit Target: $1.40
Return: -29%
Stop Target: None
STM July 17.50 calls (STM170721C00017500, $0.45, down $0.05)
Entry Price: $0.65 (5/15/2017)
Exit Target: $1.30
Return: -31%
Stop Target: None
Action: Support is at $16.25-$16 with yesterday’s low tapping $16.11. Resistance is at $16.50-$16.75.
Viavi Solutions (VIAV, $11.38, up $0.43)
June 12 calls (VIAV170616C00022500, $0.20, up $0.10)
Entry Price: $0.35 (5/5/2017)
Exit Target: $0.70-$1.05
Return: -43%
Stop Target: None
Action: Upper resistance at $11.25-$11.50 was tested following Monday’s run to its session high. Support is at $11-$10.75.
Cypress Semiconductor (CY, $13.14, down $0.01)
CY June 14 calls (CY170616C00014000, $0.20, down $0.05)
Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Return: -76%
Stop Target: None
Action: Support is at $13-$12.75 following yesterday’s backtest to $12.97. Resistance is at $13.25-$13.50.
