MomentumOptions.com Pre-Market for 11/27/2017
Tech, S&P Tap Record Highs
U.S. markets tested fresh resistance and set new all-time highs during Friday’s shortened session to wrap up a solid week of gains. The Nasdaq showed the most strength after rising 0.3% while setting an intraday record high of 6,890. The S&P 500 gained 0.2% after trading to an all-time high of 2,604 while the Dow added 0.1% after failing the 23,600 level. The Russell 2000 climbed 0.2% and came within 3 points of setting another lifetime high.
For the week, the Dow and S&P 500 were up 1% while snapping two-week losing streaks. The Nasdaq rallied 1.4% and the Russell 2000 jumped nearly 2%.
Technology and Materials were up 0.6% and 0.5% on Friday while Consumer Staples and the Financials were the only sectors in the red after slipping 0.07% and 0.04%, respectively. All sectors closed the week higher led by Technology’s 1.8% advance. Industrials added 1.3% while Consumer Discretionary was up 1.2%.
The VelocityShares Daily Inverse VIX (ZIV) continues to show strength after making a run to 8 1.07 while closing higher for the 6th-straight session. Lower resistance at 81.50-82 held with a move above the latter getting all-time highs back in play. Support remains at 80-79.50 with risk to 78-77.75 and the 50-day moving average on a move below the latter. RSI cleared early November at 60 with 70 coming into play on additional strength.
The Spiders Dow Jones Industrial Average ETF (DIA) has traded in a tight range over the past three session while setting an all-time of $236.06. Fresh resistance is at $236-$236.50 with a move above the latter being a continued bullish development. Support is at $235-$234.75with a move below the latter likely leading to continued weakness. RSI is trying to clear September resistance at 70 and would be a bullish signal on continued closes above this level. Support is at 65 with risk towards 60-55 and early to mid-November support levels.
The Dow Jones Transportation Average ($TRAN) closed slightly lower to end the week and is trying to hold current support at the 9,600 level. A move back below 9,550-9,500 would be a bearish development. Resistance is at 9,700-9,750 and the 50-day moving average and also represents the mid-September double-top breakout. A move above 9,800 would likely lead to additional strength for another run towards 10,000. RSI has flattened out after stalling near resistance at 50. Continued closes above this level would be a bullish development.
The percentage of S&P 500 stocks trading above the 50-day moving average is currently at 62% with resistance at 64%-65%. Last Wednesday peak reached 65.07% with continued closes above 65% being a bullish development. Support is at 60%-58% with risk to 55% and a level that held earlier this month on weakness. A move below 55% would be a very bearish development for the overall market.
The percentage of Nasdaq 100 stocks trading above the 200-day moving average closed just below the 65% level on Friday after testing 66.35% midweek. Resistance is at 65% with Friday’s high tapping 65.42%. This represented the highest reading of the month with a close above 67.5% being a bullish development. Support is at 62.5% with a move below this level signaling upcoming weakness in Tech.
It will be a busy week for the Fed with William Dudley and Jerome Powell speaking on Tuesday. Janet Yellen, William Dudley, and John Williams are scheduled to make comments on Wednesday. Robert Kaplan is scheduled to speak on Thursday and Friday along with James Bullard. Fedspeak, along with news over the tax bill, will likely sway market action this week.
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 ($22.42, up $0.15)
TWTR January 24 calls (TWTR180119C00024000, $0.77, up $0.07)
Entry Price: $0.70 (11/22/2017)
Exit Target: $1.40
Stop Target: None
Action: Fresh resistance us at $22.50-$22.75 with Friday high reaching $22.48. Support is at $22-$21.75.
Bank of America (BAC, $26.59, down $0.07)
BAC January 28 calls (BAC180119C00028000, $0.42, down $0.03)
Entry Price: $0.63 (11/16/2017)
Exit Target: $1.25
Stop Target: None
Action: Support is at $26.50-$26.25. Resistance is at $26.75-$26.
Rambus (RMBS, $15.17, down $0.24)
RMBS January 15 calls (RMBS180119C00015000, $0.65, down $0.15)
Entry Price: $0.35 (11/16/2017)
Exit Target: $0.70
Stop Target: 60 cents (Stop Limit)
Action: Upper support at $15.25-$15 was breached with Friday’s low tapping $15.10. Lowered resistance is at $15.25-$15.50.
TiVo (TIVO, $18.45, down $0.45)
January 20 calls (TIVO180119C00020000, $0.55, down $0.10)
Entry Price: $0.60 (10/31/2017)
Exit Target: $1.20
Stop Target: None
Action: Fresh support at $18.25-$18.80 following the backtest to $18.40. Lowered resistance is at $18.75.
Limelight Networks (LLNW, $5.86, up $0.05)
LLNW December 4 calls (LLNW171215C00004000, $1.85, flat)
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. Support at $5.75-$5.70.
TherapeuticsMD (TXMD, $5.99, down $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: Resistance is at $6-$6.25. Support is at $5.75-$5.50.