Mid-Market Update for 7/10/2017

PepsiCo (PEP) on Deck With Earnings

1:35pm (EST)

Futures were showing a slightly higher open throughout the evening but seakened into this morning’s opening bell. The action has been mostly mixed with some weakness in the small-caps as we make the turn.

I mentioned Friday would be a big day for earnings from the Financial sector but I wanted to take a peak at PepsiCo (PEP) to see if there is a possible trade ahead of, or after their announcement ahead of Tuesday’s open.

The chart shows are currently holding support at $115 and the 50-day moving average with additional help at $114 from April and May that served as prior resistance. Current hurdles are at $116-$116.50 with the recent 52-week peak north of $118.

The company has topped estimates the past four quarters by 2, 4, 8, and 5 cents, respectively with revenues topping expectations, as well. However, shares hardly budge on the news and have managed swings of less than $1 over the past three reports. However, there tends to be some movement in the following days and weeks after the earnings announcements.

With regular July options expiring in less than two weeks, traders can look to the August chain for possible trades. However, with PEP strike prices trading in $5 increments and a slow moving stock, it’s best to pass on these types of trades.

PepsiCo pays a 2.8% dividend and has been subject to takeover chatter. Income traders could look to sell credit spreads, or write covered calls, but that’s subjects for another day.

The main action I wanted to see today was strength in Tech and today’s run to higher highs look bullish. Heading into the second half of trading, the Dow is up 10 points to 21,424 while the S&P 500 is adding 5 points to 2,430. The Nasdaq is higher by 25 points to 6,178 and the Russell 2000 is climbing a point to 1,416.

I do have updated our currents trades so let’s go check the tape.


Momentum Options Play List

Closed Momentum Options Trades for 2017: 39-15 (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, $24.94, up $0.11)

BAC August 25 calls (BAC170818C00025000, $0.75, down $0.03)

Entry Price: $0.75 (7/3/2017)
Exit Target: $1.50
Return: 0%
Stop Target: None

Action: Support is at $24.75-$24.50. Resistance is at $25-$25.25.


AT&T (T, $36.97, down $0.01)

T August 37 puts (T170818P00037000, $0.80, flat)

Entry Price: $0.78 (6/29/2017)
Exit Target: $1.60
Return: 3%
Stop Target: None

Action: Support is at $36.75-$36.50. Resistance is at $37.25-$37.50.


TherapeuticsMD (TXMD, $4.96, down $0.05)

TXMD August 7.50 calls (TXMD170818C00007500, $0.40, flat)

Entry Price: $0.50 (6/22/2017)
Exit Target: $1.00
Return: -20%
Stop Target: None

Action: Support is at $4.75 and the 50-day moving average. Lower resistance at $5-$5.25.


iPath S&P 500 VIX Futures (VXX, 12.84, down 0.24)

VXX August 14 calls (VXX170818C00014000, $0.90, flat)

Entry Price: $1.20 (6/15/2017)
Exit Target: $2.40
Return: -25%
Stop Target: None

Action: Support is at 13-12.75. Resistance is at 13.50.