MomentumOptions.com Pre-Market Update for 11/22/2017
Tech Leads Bulls on Another Breakout
The market made another run to fresh all-time highs on Tuesday with the Nasdaq leading the way after gaining 1.1%. The index is just 2% away from challenging the 7,000 level following today’s dash to 6,862.
The Dow and S&P 500 rose 0.7% while clearing 2,600 and 23,600 on their way to record highs before closing slightly below these levels.
The Russell 2000 extended its win streak to 4-straight after surging 1% while tapping a lifetime high just south of the 1,520 level.
All of the major sectors finished in the green and were led by Technology and Health Care which rallied 1% and 0.9%, respectively. The Industrial and Consumer Discretionary sectors were up 0.7% and 0.6%.
In economic news, the October Chicago Fed National Activity Index Level came in at 0.65 and expectations of 0.20.
Existing Home Sales surged 2% to a 5,480,000 unit rate versus forecasts for a rise of 0.7% to a 5,430,000 unit rate.
The Spiders S&P Homebuilders ETF (XHB) made a strong move above prior October resistance at $41.50 following Monday’s close above this level. Today’s 52-week high reached $42.24 with multi-year resistance at $43.50-$44. We mentioned late last month the all-time high is north of $46 that was reached in February 2006 and when XHB started trading. Current support is at $42-$41.75 with a move back below $41.50 signaling a short-term peak.
RSI is approaching resistance at 70 with a move above this level being a continued bullish development. The mid-October high cleared 80 and the 50-day moving average remains in a strong uptrend.
The Spider S&P 500 ETF (SPY) traded to an all-time high of $260.20 to break out of a trading range between $256-$258 that had lasted throughout the month. We mentioned last week continued closes above $258 could lead to a run towards $259.50-$260. This level held in two of the past three sessions before today’s surge and now represents short-term support.
RSI is trying to clear and hold resistance at 65 with a close above this level likely leading towards a run to 70-75. The 65-60 area served as prior support in mid-October and September with a close back below the latter signaling upcoming market weakness.
The VelocityShares Daily Inverse VIX (ZIV) closed higher for the 4th-straight session after making a push to 80.27. We mentioned multiple closes above 79.50-80 would lead to renewed market strength with fresh resistance at 81.50-82 on continued closes above the latter. Support remains at 78-77.50 and the 50-day moving average if 79.50 fails.
I have updated our current trade so let’s go check the tape. I could have two new Trade Alerts today so stay locked-and-loaded.
Special Notice: Folks, I received over 200 requests for Text Alerts on Tuesday, Thank You! I worked with my new support team by reading my emails and working with them to add the to the system.
We went well into the evening and we plan to send a test out at some point today, and another on Friday. Send me your comments and if you do not get a Text Alert today or on Friday after sending me an email, hit me up again over the weekend.
The Text Alerts will NOT have any trade instructions until we are 100% certain they work, and for everyone that enrolls. Get on board over the next few days by sending me an email with your digits.
Momentum Options Play List
Closed Momentum Options Trades for 2017: 50-21 (70%). 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, $26.73, down $0.01)
BAC January 28 calls (BAC180119C00028000, $0.52, flat)
Entry Price: $0.63 (11/16/2017)
Exit Target: $1.25
Stop Target: None
Action: Over 28,000 contracts traded on Tuesday and between a range of 47-53 cents. Open Interest is approaching 300,000 contracts and is signaling traders are easily expecting a move above this level.
Support is at $26.50-$26.25. Resistance is at $26.75-$26.
Rambus (RMBS, $15.35, up $0.28)
RMBS January 15 calls (RMBS180119C00015000, $0.70, up $0.10)
Entry Price: $0.35 (11/16/2017)
Exit Target: $0.70
Stop Target: 40 cents, raise to 50 cents (Stop Limit)
Action: Raise the Stop Limit from 40 cents to 50 cents.
Fresh and multi-year resistance is at $15.50-$15.75 following yesterday’s run to $15.39 and another 52-week peak. Rising support is at $15.25-$15.
TiVo (TIVO, $17.65, up $0.15)
January 20 calls (TIVO180119C00020000, $0.55, flat)
Entry Price: $0.60 (10/31/2017)
Exit Target: $1.20
Stop Target: None
Action: Shares were zooming 13% in after-hours trading and tapping on $20 after a judge ruled Comcast (CMCSA) infringed on TiVo’s patents.
Late Tuesday the U.S. International Trade Commission ruled that Comcast set-top boxes violated two patents of Rovi (ROVI), a recent hot IPO, owned by TiVo.
I mentioned shares could make a substantial move towards $20 on good news with continued closes above this level getting $22-$22.50 in the mix.
Limelight Networks (LLNW, $5.89, up $0.09)
LLNW December 4 calls (LLNW171215C00004000, $1.90, up $0.10)
Entry Price: $0.37 (9/21/2017)
Exit Target: $2.50 (Limit Order on half at $2.50)
Stop Target: $1.70 (Stop Limit)
Action: Resistance is at $5.90-$6 with Tuesday’s high reaching $5.96. Support at $5.75-$5.70.
TherapeuticsMD (TXMD, $5.99, up $0.09)
TXMD December 7.50 calls (TXMD171215C00007500, $0.15, flat)
Entry Price: $0.95 (8/17/2017)
Exit Target: $1.90
Stop Target: None
Action: Resistance is at $6-$6.25. Support is at $5.75-$5.50.