MomentumOptions.com Pre-Market Update for 11/10/2020
Market Taps Fresh Lifetime Highs
Wall Street rebounded big time on Monday with the major indexes trading to fresh all-time highs following news Pfizer’s (PFE) coronavirus vaccine is more than 90% effective and could be released by the end of the month. The company has partnered with BioNTech (BNTX) and announced their vaccine candidate was found to be over 90% effective in preventing coronavirus in the first set of data released from their ongoing Phase 3 trial.
The companies will also present additional data to the FDA in its guidance for potential Emergency Use Authorization and will be available by the third week of November. If approved, the drug could be widely available in the U.S. by the first week in December.
The Russell 2000 tapped an opening high of 1,745 while settling at 1,705 (+3.7%). Unchartered territory and lower resistance at 1,735-1,750 was cleared and held. Continued closes above the latter would be a bullish signal for continued momentum towards 1,760-1,775.
The Dow traded to an intraday peak of 29,933 before closing at 29,157 (+3%). New and lower resistance at 29,750-30,000 was tripped but held. A move above the latter would indicate additional upside towards 30,250-30,500.
The S&P 500 ended at 3,550 (+1.2%) after topping out at 3,645 shortly after the opening bell. Current and lower resistance at 3,625-3,650 was cleared but held. A close above the latter would suggest strength towards 3,675-3,700.
The Nasdaq tapped a morning high of 12,108 while finishing lower at 11,713 (-1.5%). Fresh and lower resistance at 12,100-12,200 was breached but held. A close above the latter would signal a further run towards 12,300-12,400.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) extended its losing streak to six-straight sessions with the morning low reaching 22.41. Prior and upper support from late August at 22.50-22 was breached but held. A close below the latter would indicate a retest towards 20.50-20.
Lowered resistance is at 26-26.50 followed by 27-27.50.
The Spider Small-Cap 600 ETF (NYSE: SLY) was up for the second time in three sessions after testing an intraday high of $71.41. Longer-term and lower resistance from last December at $71-$71.50 was cleared but held. A close above the latter would be an ongoing bullish signal with additional momentum towards $72.50-$73.
Fresh support is at $69-$68.50 followed by $67-$66.50.
RSI (relative strength indicator) is back in an uptrend with lower resistance at 65-70 getting recovered. A move above the latter would signal additional strength towards 75 and the June peak. Support is at 60-55.
The Energy Select Sector SPDR Fund (NYSEArca: XLE) made a strong move to clear its 50-day moving average with the intraday high hitting $33.79. Prior and lower resistance from mid-September at $33.50-$34 was cleared but held. A close above the latter would suggest additional strength towards $35.50-$36 and the 200-day moving average.
Current support is now at $32.50-$32. A close below the latter would likely signal a retest towards $31.50-$31.
RSI is in a strong uptrend with lower resistance at 65-70 holding. A close above the latter would signal strength towards 75 and the June top. Support is at 60.
We got some great pin action yesterday so let’s go check the tape.
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Closed Momentum Options Trades for 2020: 38-11 (78%). 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.
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United States Steel (X, $10.53, up $0.63)
X December 10 calls (X201218C00010000, $1.15, up $0.35)
Entry Price: $0.70 (11/6/2020)
Exit Target: $1.40, raise to $2
Stop Target: $1 (Stop Limit)
Action: Raise the Exit Target from $1.40 to $2. The high reached $1.32 yesterday. Set an initial Stop Limit at $1 to start protecting profits.
Monday’s peak reached $11 with lower resistance from early June at $10.75-$11 getting cleared and holding. Fresh support is at $10.25-$10.
AT&T (T, $28.30, up $0.86)
T December 28 calls (T201218C00028000, $1.00, up $0.50)
Entry Price: $0.55 (10/29/2020)
Exit Target: $1.10, raise to $1.60
Stop Target: 85 cents (Stop Limit)
Action: Raise the Exit Target from $1.10 to $1.60. The calls reached a peak of $1.28. Set a Stop Limit at 85 cents to start protecting profits.
Prior and lower resistance from mid-September $28.75-$29 was breached but held with the high at $28.79. Fresh support is at $28.25-$28.