MomentumOptions.com Pre-Market Update for 10/23/2020
Bulls Rebound as Stimulus Talk Continues
Wall Street settled higher Thursday as talks in DC on a new fresh coronavirus fiscal relief package continue to take center stage. House Speaker Pelosi said an agreement is near while Economic director Kudlow downplayed the likelihood of a deal before the Presidential election.
The Russell 2000 finished at 1,630 (+1.7%) with the session high at 1,631. Prior and lower resistance at 1,620-1,635 was reclaimed. A close above the latter would be an ongoing bullish signal for another run towards 1,650-1,665.
The S&P 500 settled at 3,453 (0.5%) following the intraday push to 3,460. Prior and lower resistance at 3,475-3,500 was recovered. A move above the latter would suggest a retest towards 3,525-3,550.
The Dow tested an afternoon peak of 28,421 while closing at 28,363 (+0.5%). Current and lower resistance at 28,250-28,500 was cleared and held. A close above the latter would indicate additional strength towards 28,750-29,000.
The Nasdaq reached an afternoon peak of 11,548 before ending at 11,506 (+0.2%). Near-term and lower resistance at 11,500-11,600 was tripped and held. A close above the latter would indicate ongoing strength towards 11,700-11,800.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the second-straight session after testing an afternoon low of 27.68. Current and upper support at 28-27.50 was breached but held. A close below the latter would signal another retest towards 26.50-26 and the 50-day moving average.
Resistance remains at 30.50-31 and the 200-day moving average.
The SPDR S&P 500 ETF (NYSEArca: SPY) was up for the second time in three sessions after trading to a high of $345.24. Lower resistance at $345-$345.50 was cleared but held. A close above the latter would indicate additional strength towards $346.50-$347.
Current support is at $342.50-$342 followed by $339.50-$339 and the 50-day moving average.
RSI is in a slight uptrend with lower resistance 55-60 holding. A move above the latter would signal additional momentum towards 65-70 and prior levels throughout the first half of August. Support is at 50 and a level that has been holding since late September.
The Real Estate Select Sector SPDR Fund (NYSE: XLRE) was down for the fourth time in five sessions after trading to a midday low of $35.33. Current and upper support at $35.50-$35.25 was breached and failed to hold. A close below the latter reopens downside risk towards $35-$34.75 and the 200-day moving average.
Lowered resistance is at $35.75-$36 and the 50-day moving average.
We got some nice pin action yesterday so let’s go check the tape.
Momentum Options Play List
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MGM Resorts International (MGM, $22.62, up $1.21)
MGM November 23 calls (MGM201120C00023000, $1.55, up $0.45)
Entry Price: $0.95 (10/16/2020)
Exit Target: $1.90
Stop Target: $1.25 (Stop Limit)
Action: Set a Stop Limit at $1.25 to start protecting profits.
Thursday’s high hit $22.68 with prior and lower resistance from late September at $22.50-$22.75 getting cleared and holding. Fresh support is at $22.25-$22 and the 50-day moving average.
Freeport McMoRan (FCX, $18.35, up $0.63)
FCX November 18 calls (FCX201120C00018000, $1.25, up $0.20)
Entry Price: $0.95 (10/9/2020)
Exit Target: $1.90
Stop Target: 95 cents, raise to $1.05 (Stop Limit)
Action: Raise the Stop Limit from 95 cents to $1.05.
Shares zoomed to another new 52-week high of $18.40 with fresh and lower resistance at $18.25-$18.50 getting cleared and holding. Support is at $18-$17.75.
Rambus (RMBS, $14.25, up $0.01)
RMBS November 13 puts (RMBS201120P00013000, $0.30, flat)
Entry Price: $0.90 (8/21/2020)
Exit Target: $1.80
Stop Target: None
Action: Lower resistance at $14.25-$14.50 was recovered on the bounce to $14.30 yesterday. Support is at $14-$13.75.