MomentumOptions.com Pre-Market Update for 9/15/2020
M&A News Propels Market Higher
The market showed strong gains on Monday following ongoing developments for a coronavirus vaccine along with a slew of high profile merger & acquisitions news. Specially, AstraZeneca (AZN) announced clinical trials of its coronavirus vaccine has resumed in the United Kingdom. The study was paused last week after one person in the trial became ill.
Meanwhile, Oracle (ORCL) has emerged as the winner in the takeover for TikTok after the company announced it will serve as the trusted technology provider.
The Russell 2000 settled at 1,536 (+2.7%) after zooming to an intraday high of 1,538. Current and lower resistance at 1,535-1,550 was cleared and held on the close back above the 50-day moving average. Continued closes above the latter would be a bullish signal for a run towards 1,560-1,575.
The Nasdaq traded to a midday peak of 11,118 before closing at 11,056 (+1.9%). Near-term and lower resistance at 11,100-11,200 was breached but held with the 50-day moving average also being reclaimed. A move above the latter would indicate further strength towards 11,300-11,400.
The S&P 500 ended at 3,383 (+1.3%) after topping out at 3,402. Lower resistance at 3,400-3,425 was tripped but held with a pop above the latter suggesting another push towards 3,450-3,475.
The Dow tested an afternoon high of 28,086 while finishing at 27,993 (+1.2%). Prior and lower resistance at 28,000-28,250 was cleared but held. A close above the latter would be a bullish signal for a retest towards 28,500-28,750.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) extended its winning streak to three-straight sessions with the intraday high reaching $165.08. Near-term and lower resistance at $165-$165.50 was breached but held with more important hurdles at $166 and the 50-day moving average.
Rising support is at $164-$163.50 followed by $162.50-$162.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the second-straight session following the intraday fade to 25.38. Upper support at 25.50-25 and the 50-day moving average was breached but held.
Lowered resistance is at 26.50-27 followed by 28.50-29 and the 200-day moving average.
The SPDR S&P 500 ETF (NYSEArca: SPY) was up for the second-straight session after testing a high of $340.38. Prior and lower resistance at $340-$340.50 was cleare but held. A close above the latter would indicate additional strength towards $342.50-$342.
Support is at $337-$336.50 followed by $335.50-$335.
The Health Care Select Sector SPDR Fund (NYSEArca: XLV) traded to a second-half high of $106.66. Current and lower resistance at $106.50-$107 was cleared but held on the close back above the 50-day moving average. A move above the $108 level would signal a possible retest towards $109.50-$110 with the recent all-time peak at $109.74.
Support is at $105.50-$105 with backup help at $104-$103.50.
Today’s earnings announcements:
Before the open: Cracker Barrel Old Country Store (CBRL), Endava (DAVA), Francesca’s Holdings (FRAN), Harmony Gold Mining (HMY)
After the close: Adobe (ADBE), ClearSign Combustion (CLIR), FedEx (FDX)
I have updated our current trades so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2020: 31-10 (76%). 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 “Stops” entered to close any trades or “Limit 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 Daily updates.
AT&T (T, $29.14, up $0.14)
T October 28 puts (T201016P00028000, $0.45, down $0.12)
Entry Price: $0.55 (9/10/2020)
Exit Target: $1.10
Stop Target: None
Action: Lower resistance at $29.25-$29.50 was breached but held with Monday’s peak reaching $29.30. Slightly rising support is at $29-$28.75.
Rambus (RMBS, $13.61, up $0.30)
RMBS November 13 puts (RMBS201120P00013000, $0.80, down $0.10)
Entry Price: $0.90 (8/21/2020)
Exit Target: $1.80
Stop Target: None
Action: Shares traded to a late day high of $13.66 with current and lower resistance at $13.50-$13.75 getting cleared and holding. Support remains at $13.25-$13.