MomentumOptions.com Pre-Market Update for 5/24/2017

Bulls Get Hat Trick

8:00am (EST)

The market continued its winning ways as the bulls extended their winning streak to three straight sessions. The bears are attempting to hold back another breakout to all-time highs as volatility continues to move back towards historic lows and possibly the single-digits. The stair-stepping to higher highs looks promising but another elevator drop could be around the corner if multi-month resistance continues to hold.

The Dow added 42 points, or 0.2%, to close at 20,937. The blue-chips held positive territory for the third-straight session after opening at 20,908 and trading up to 20,961. Lower resistance at 20,950-21,000 was breeched but held with a close above the latter a bullish development. Support remains at 20,800-20,700 with a drop below 20,600 a bearish development.

The S&P 500 climbed 4 points, or 0.2%, to finish 2,398. The index made a run past upper resistance at 2,395-2,400 by nearly a point and ahead of Wall Street’s lunch break but fell 4 points shy of the all-time high north of 2,405. Continued closes above 2,400-2,405 could lead to a push towards 2,420-2,425. Support is at 2,380-2,375 with a close 2,370 a warning sign.

The Nasdaq popped 5 points, or 0.1%, to end at 6,138. Tech kissed a morning high of 6,150 with lower resistance at 6,150-6,175 holding. The 17-point gain was quickly erased on the backtest to 6,121 within the opening 30 minutes of action. Support at 6,100-6,075 easily held with a breech below 6,050 still a signal to possibly go short.

The Russell 2000 advanced nearly 4 points, or 0.3%, to settle just under 1,381. The small-caps were slightly weak during the first half of trading with the low checking in at 1,372. Rising support at 1,370-1,365 held tight with a move below 1,360 a warning signal. I mentioned a close above 1,380 this week would be bullish for another run towards resistance at 1,390-1,400.

The S&P 500 Volatility Index ($VIX, 10.72, down 0.21) stayed mostly underwater aside from the intraday test to 11. Continued closes below 11.50 remain bullish with resistance and warning signs at 12.50-13.50. Upper support at 10.50-10 held on the low of 10.56.

From desk to press, futures look like this: Dow (-12); S&P 500 (-2); Nasdaq 100 (-3).

Here is an updated version for all 2017 trades and I hope to have text alerts within the next couple of weeks:

https://www.momentumoptions.com/open-trades-2017/

 

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, $8.26, down $0.15)

FOLD July 8 calls (FOLD170721C00008000, $0.95, down $0.05)

Entry Price: $0.85 (5/22/2017)
Exit Target: $1.70-$2.55
Return: 12%
Stop Target: None

Action: Support is at $8.25-$8 with yesterday’s low reaching $8.10. Resistance is at $8.50-$8.75.

 

Spider Gold Shares (GLD, $119.14, down $0.76)

GLD June 122 calls (GLD170616C00122000, $0.45, down $0.25)

Entry Price: $0.75 (5/22/2017)
Exit Target: $1.50
Return: -40%
Stop Target: None

Action: Tuesday’s low tapped $118.98. Support is at $119-$118.75. Resistance at $119.50-$120.

 

Flex (FLEX, $16.73, down $0.10)

FLEX July 17 calls (FLEX170721C00017000, $0.55, down $0.05)

Entry Price: $0.45 (5/16/2017)
Exit Target: $0.90
Return: 22%
Stop Target: None

Action: Support is at $16.50-$16.25. Yesterday’s low reached $16.52. Resistance is at $17-$17.25.

There has been two raised Price Targets by bullish analysts this month. One analyst reiterated a Buy rating with an $18 Price Target on FLEX, up from $17.50. Another raised shares from Hold to a Buy and the Price Target from $15 to $21.50. A move above $17 gets fresh 52-week peaks in play.

 

STMicroelectronics (STM, $16.11, down $0.17)

STM October 20 calls (STM171020C00020000, $0.45, down $0.05)

Entry Price: $0.70 (5/15/2017)
Exit Target: $1.40
Return: -36%
Stop Target: None

 

STM July 17.50 calls (STM170721C00017500, $0.40, down $0.05)

Entry Price: $0.65 (5/15/2017)
Exit Target: $1.30
Return: -38%
Stop Target: None

Action: Lower support at $16.25-$16 held on the backtest to $16.07. Resistance is at $16.50-$16.75.

 

Viavi Solutions (VIAV, $11.26, down $0.12)

June 12 calls (VIAV170616C00022500, $0.17, down $0.03)

Entry Price: $0.35 (5/5/2017)
Exit Target: $0.70-$1.05
Return: -51%
Stop Target: None

Action: Support is at $11.25-$11 with Tuesday’s low touching $11.20. Resistance is at $11.50.

I would like to see continued closes above $11.75 this week as these options expire 3 weeks from Friday. The 52-week high is at $11.89. These are considered “cheap” options with an entry price of 35 cents. I plan to keep the trade open into June as long as $11 holds on any weakness. I mentioned shares are capable of huge upswings as evident by Monday’s surge from $10.95 to $11.38.

 

Cypress Semiconductor (CY, $13.04, down $0.10)

CY June 14 calls (CY170616C00014000, $0.15, down $0.05)

Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Return: -82%
Stop Target: None

Action: Support is at $13-$12.75 with a close below the latter an exit sign for this trade. Tuesday’s low reached $12.89. Resistance is at $13.25-$13.50.