Pre-Market for 1/18/2018

Round Numbers Back in Play

8:00am (EST)

The market showed opening momentum at the start of Wednesday’s trading and were able to hold positive territory while pushing fresh all-time highs and round number resistance. The action was certainly calmer than the previous session with volatility settling back down.

The Dow showed the most strength after rallying 1.3% to an intraday record high of 26,130 while clearing and holding the 26,000 level into the closing bell. The Nasdaq rose 1% after trading past 7,300 to 7,309 while setting just below this level and falling shy of its all-time high by 21 points.

The S&P 500 gained 0.9% after making a run to 2,807 and another lifetime high while ending the session above the 2,800 level. The Russell 2000 added 0.8% after testing a high of 1,589 but struggled with resistance at 1,600 following Tuesday’s 4-point trip past this level.

Technilogy and Consumer Staples and showed the most strength after advancing 1.5% and 1.1%, respectively. Health Care was up 1% and Energy was higher by 0.9%. There were no sector laggards.

The Spider Small-Cap 600 ETF (SLY) closed higher for the 9th time in the past 11 sessions after reaching a peak of $138.03. Fresh resistance at $138.50-$139 and Tuesday’s all-time peak at $138.86 held. Continued closed above $139 gets $140.50-$142 in the mix. Rising and shaky support is at $136.50-$136 with a close below $135.50 being a slightly bearish development.

RSI briefly cleared November resistance at 70 with continued closes back above this level being a bullish signal for a possible push towards 80-90 and late September and early October highs.

The Utilities Select Spider (XLU) rebound today but continues to underperform after testing Mid-April and May support at $50-$49.75. Tuesday’s low tapped $49.86 with a close below $49.75 signaling continued weakness towards $49-$48.75 and early March support levels. Near-term resistance is at $50.75-$51.

RSI remains in extremely oversold territory after falling towards the 20 level and holding. Resistance is at 30-35 with continued closes above the latter signaling a possible near-term bottom is in.

Trading graph

I have raised the Stop Limit on our FLEX trade as it is now approaching a triple-digit return.

Momentum Options Play List

Closed Momentum Options Trades for 2018: 4-1 (80%). 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.

Blackberry (BB, $13.67, down $0.14)

BB March 15 calls (BB180316C00015000, $0.45, down $0.02)

Entry Price: $0.47 (1/16/2018)
Exit Target: $1.00
Return: -4%
Stop Target: None

Action: Support is at $13.50 on continued weakness with yesterday’s low tapping $13.57. Resistance at $13.75-$14.

Trading graph

Apache (APA, $46.53, up $0.26)

APA February 50 calls (APA180216C00050000, $0.80, up $0.05)

Entry Price: $1.07 (1/16/2018)
Exit Target: $2.10
Return: -25%
Stop Target: None

Action: Lower resistance at $46.50-$46.75 held on Wednesday’s run to $46.94. Support is at $46-$45.75.

Trading graph

Cadence Design Systems (CDNS, $44.86, up $0.58)

CDNS February 48 calls (CDNS180216C00048000, $0.70, up $0.05)

Entry Price: $0.70 (1/16/2018)
Exit Target: $1.40
Return: 0%
Stop Target: None

Action: Resistance is at $45.25-$45.50. Support is at $44.75-$44.50.

Trading graph

Flex (FLEX, $19.44, up $0.42)

FLEX February 19 calls (FLEX180216C00019000, $0.85, up $0.25)

Entry Price: $0.45 (1/10/2018)
Exit Target: $1.00
Return: 89%
Stop Target: 55 cents, raise to 70 cents (Stop Limit)

Action: Raise the Stop Limit from 55 cents to 70 cents.

Fresh resistance is at $19.50-$19.75 following yesterday’s run to a 52-week high of $19.48. Rising support is at $19.25-$19.

Trading graph