MomentumOptions.com Mid-Market Update for 5/31/2017

Oil, Financial Sector Weigh on Market

12:35pm (EST)

The bears have controlled much of today’s action with oil down another 4% and the Financial stocks pulling back. Crude Oil has fallen below $48 a barrel and is worrying the talking heads but Brent Oil is holding $52. While most Wall Street analysts are rooting for Crude to recover $50, I think it’s more important for Brent to hold this level. If Brent falls below $50, it could have a major impact on the market.

Elsewhere, I mentioned coming into the week a number of Financial stocks were struggling with their 50-day moving averages and bearish chart setups. Most of the losses are in the 2%-3% range with the damage pushing shares of Goldman Sachs (GS) to fresh 2017 lows.

Shares of GS have fallen below the 200-day moving average with today’s drop below $210. This level served as prior resistance from the November 2016 breakout and will now try to hold as support. A move below $205-$200 would be a very bearish development. Short-term resistance is at $215.

The near-term option premiums on GS are expensive due to the triple-digit stock price but there are other setups we can look at if the weakness continues in the sector. Bank of America (BAC), for instance, could be a short if shares fall below $22. This level has served as multi-month support since early December.

As far as the market, near-term support is holding and today’s close will be important for the VIX and the small-caps. The Dow is down 24 points to 21,005 while the S&P 500 is off 4 points to 2,408. The Nasdaq is down 12 points to 6,190 and the Russell 2000 is sliding 6 points to 1,364.

I have updated our current trades so let’s go check the action.

 

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.

 

Sony (SNE, $36.56, up $0.08)

SNE July 37 calls (SNE170721C00037000, $0.90, up $0.05)

Entry Price: $0.85 (5/26/2017)
Exit Target: $1.70
Return: 6%
Stop Target: None

Action: Resistance is at $36.75-$37. Support is at $36.25-$36.

 

Amicus Therapeutics (FOLD, $7.86, up $0.20)

FOLD July 8 calls (FOLD170721C00008000, $0.75, up $0.10)

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

Action: Resistance is at $7.75-$8. Support is at $7.50-$7.25.

 

Spider Gold Shares (GLD, $120.63, up $0.49)

GLD June 122 calls (GLD170616C00122000, $0.60, up $0.05)

Entry Price: $0.75 (5/22/2017)
Exit Target: $1.50
Return: -20%
Stop Target: None

Action: Resistance is at $121-$121.50. Support is at $119.25-$119.

 

Flex (FLEX, $17.16, down $0.09)

FLEX July 17 calls (FLEX170721C00017000, $0.70, down $0.05)

Entry Price: $0.45 (5/16/2017)
Exit Target: $0.90
Return: 56%
Stop Target: 47 cents (Stop Limit)

Action: Support is at $17-$16.75. Resistance is at $17.25-$17.50.

 

STMicroelectronics (STM, $16.46, down $0.10)

STM October 20 calls (STM171020C00020000, $0.55, flat)

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: Yesterday’s peak reached $16.60. Resistance is at $16.75-$17. Support is at $16.25-$16.

 

Viavi Solutions (VIAV, $11.28, down $0.01)

June 12 calls (VIAV170616C00022500, $0.12, down $0.04)

Entry Price: $0.35 (5/5/2017)
Exit Target: $0.70-$1.05
Return: -66%
Stop Target: None

Action: Support is at $11. Resistance is at $11.50.

 

Cypress Semiconductor (CY, $13.97, up $0.08)

CY June 14 calls (CY170616C00014000, $0.40, flat)

Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Return: -53%
Stop Target: None

Action: Resistance is at $14-$14.25. Support is at $13.75-$13.50.