MomentumOptions.com Pre-Market Update for 6/13/2017
Bears Get Clean Sweep/ Profit Alert (FOLD)
The bears got a clean sweep on Monday as the major indexes pulled back off their highs for the second-straight session. The bulls did well by holding near-term support and keeping volatility under control as the sector rotation from Friday continued. It is too early to say if a bottoming process is forming in Tech as lower lows were tagged but the next few days will be crucial in any recovery.
The Dow fell 36 points, or 0.2%, to finish at 21,235. The blue-chips saw a little green on the open following a 6-point pop to 21,277. Resistance and blue-sky territory remain at 21,450-21,500 on another move above 21,300. Support at 21,200-21,100 held on the intraday dip to 21,186.
The S&P 500 gave back 2 points, or 0.1%, to close 2,429. The index traded in negative territory throughout the session with the low reaching 2,419. Near-term support at 2,425-2,420 was stretched with backup help at 2,410-2,400. Lowered resistance is at 2,440-2,450.
The Nasdaq dropped 32 points, or 0.5%, to settle at 6,175. Tech opened at 6,153 before tumbling to a low of 6,110 shortly after the opening bell. Lower support at 6,150-6,100 held with a move below 6,075-6,050 and the 50-day moving average being a bearish development. Near-term resistance is at 6,200-6,225.
The Russell 2000 slipped over 2 points, or 0.2%, to end at 1,419. The small-caps held upper support at 1,410-1,400 on the weakness to 1,415 during the morning action. The intraday run to 1,426afterwards cleared upper resistance at 1,420-1,425 but levels that failed to hold into the closing bell.
The S&P 500 Volatility Index ($VIX, 11.46, up 0.76) stayed elevated throughout the session with the high tapping 12.37. Upper resistance at 11.50-12.50 and the 50/100-day moving averages held with a close above 12.75 and the 200-day a warning sign for continued market weakness. Support has moved up to 10.50-10.
I have a Profit Alert for FOLD this morning and I have raised the Stop Limit for BAC. If the VIX does clear 12.75, I could have a New Trade today. I’m also watching GLD and SBUX as possible plays along with a number of other bullish/ bearish trades. However, there could be another day or two of choppy action before the next trend sets in so we might need to be a little patient.
From desk to press, futures look like this: Dow (+21); S&P 500 (+2); Nasdaq 100 (+7).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 35-12 (74%). 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.
Bank of America (BAC, $23.78, up $0.11)
BAC July 23 calls (BAC170721C00023000, $1.30, up $0.07)
Entry Price: $0.60 (6/5/2017)
Exit Target: $1.50
Stop Target: $1.00, raise to $1.10 (Stop Limit)
Action: Raise the Stop Limit from $1.00 to $1.10.
Shares traded to a high of $24.03 while holding lower resistance at $23.75-$24. Support is at $23.50-$23.25.
Flex (FLEX, $16.72, down $0.61)
FLEX July 18 calls (FLEX170721C00018000, $0.10, down $0.20)
Entry Price: $0.40 (6/1/2017)
Exit Target: $0.80
Stop Target: None
Action: Shares tested a low of $16.55 yesterday. Lowered support is at $16.50-$16.25. Resistance is at $17.
Amicus Therapeutics (FOLD, $8.35, down $0.11)
FOLD July 8 calls (FOLD170721C00008000, $0.85, down $0.15)
Entry Price: $0.85 (5/22/2017)
Exit Target: $1.70-$2.55
Stop Target: 90 cents (Stop Limit)
Action: The Stop Limit at 90 cents tripped on Monday with the high reaching 91 cents.
The backtest to $8.04 was a disappointment but I will keep shares on my Watch List for another possible reentry point. We can use July, or August call options, if shares clear $8.50-$8.75 over the next few weeks.
STMicroelectronics (STM, $15.69, down $0.85)
STM October 20 calls (STM171020C00020000, $0.30, down $0.20)
Entry Price: $0.70 (5/15/2017)
Exit Target: $1.40
Stop Target: None
STM July 17.50 calls (STM170721C00017500, $0.20, down $0.25)
Entry Price: $0.65 (5/15/2017)
Exit Target: $1.30
Stop Target: None
Action: Fresh support is at $15.50-$15.25 following Monday’s backtest to $15.32. Resistance is at $15.75-$16.