MomentumOptions.com Pre-Market for 11/24/2017
Tech, Small-Caps Tap Record Highs
The market traded in a tight range on Wednesday while setting record highs before ending the session mixed. The Dow and S&P 500 failed in their attempts at setting all-time highs after opening higher but spending the majority of the session underwater afterwards. The losses were contained with the indexes slipping 0.3% and 0.1%, respectively.
The Nasdaq extended its winning streak to 3-straight after rising 0.1% and reaching a record high north of 6,874 intraday. Meanwhile, the Russell 2000 reached a lifetime intraday high of 1,524 before settling slightly lower with a loss of 0.1%.
The PowerShares QQQ (QQQ) traded to an all-time high of $155.84 with fresh resistance now at $155.75-$156. Continued closes above the latter could lead to a blowoff rally towards $157.50-$158. Current support is at $155-$154.50 with the latter representing the recent double-top breakout. A move back below $154 gets the prior trading range down to $152 back in play and levels that have held throughout the month. RSI is trying to clear and hold October resistance at 70 with continued closes above this level signaling additional strength.
Energy showed sector strength after rising 0.4%. Consumer Discretionary and Industrials also showed slight gains with the sectors gaining 0.1%. Financials lagged after falling 0.5% while Real Estate and the Materials sectors slipped 0.3%.
The Health Care Select Sector Spider (XLV) recently held early September support at the $80.50 level and an area that represented a triple-top breakout. A trading range has formed throughout this month with a close below $80.50 being a bearish development. Current resistance is at $81.75-$82 with today’s high tapping $81.92. The 50-day moving average is in a downtrend but could improve with continued closes above $82.25-$82.50. RSI is trying to clear resistance at 50 and a level that served as prior support in late September and mid-October.
I have updated our current trades including an adjustment to our bullish RMBS position. I have also set the parameters of the TWTR trade from Wednesday.
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.
Twitter ($22.27, up $0.39)
TWTR January 24 calls (TWTR180119C00024000, $0.70, up $0.12)
Entry Price: $0.70 (11/22/2017)
Exit Target: $1.40
Stop Target: None
Action: Set an Exit Target at $1.40.
Call volume was heavy across the board in TWTR on Wednesday with shares setting a fresh 52-week peak of $22.50. The TWTR December 25 calls (TWTR17121500025000, $0.18, up $0.06) traded over 7,500 contracts with bullish traders clearly expecting a move above this level by mid-December.
I went with the January 24 calls to give the trade more time to play out. These options will double from current levels if shares clear $25.40, technically, by mid-January. Fresh support is at $22-$21.75.
Bank of America (BAC, $26.66, down $0.07)
BAC January 28 calls (BAC180119C00028000, $0.45, down $0.07)
Entry Price: $0.63 (11/16/2017)
Exit Target: $1.25
Stop Target: None
Action: Support is at $26.50-$26.25 with Wednesday’s low kissing $26.59. Resistance remains at $26.75-$26.
Rambus (RMBS, $15.41, up $0.06)
RMBS January 15 calls (RMBS180119C00015000, $0.80, up $0.10)
Entry Price: $0.35 (11/16/2017)
Exit Target: $0.70
Stop Target: 50 cents, raise to 60 cents (Stop Limit)
Action: Raise the Stop Limit from 50 cents to 60 cents to further protect profits.
Lower resistance at $15.50-$15.75 was tested on Wednesday’s high. Support is at $15.25-$15.
TiVo (TIVO, $18.90, up $1.25)
January 20 calls (TIVO180119C00020000, $0.65, up $0.10)
Entry Price: $0.60 (10/31/2017)
Exit Target: $1.20
Stop Target: None
Action: Resistance is at $19.25-$19.50 following the run to $19.48. Fresh support is at $18.50-$18.75.
Limelight Networks (LLNW, $5.81, down $0.08)
LLNW December 4 calls (LLNW171215C00004000, $1.85, down $0.05)
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: Support at $5.75-$5.70. Resistance is at $5.90-$6.
TherapeuticsMD (TXMD, $6.05, up $0.06)
TXMD December 7.50 calls (TXMD171215C00007500, $0.15, flat)
Entry Price: $0.95 (8/17/2017)
Exit Target: $1.90
Stop Target: None
Action: Lower resistance at $6-$6.25 was cleared on Wednesday test to $6.10. Support is at $5.75-$5.50.