MomentumOptions.com Pre-Market Update for 11/11/2020
Tech Shows Continued Weakness/ Profit Alert (X)
Wall Street closed on both sides of the ledger on Tuesday as the prospect of a vaccine and return to normal depressed Tech with beaten down sectors like travel and leisure outperforming. While a highly effective vaccine was great news, the manufacturing, distribution and the high rate of vaccination afterwards for heard immunity will take some time.
The Russell 2000 traded to a high of 1,741 while settling at 1,737 (+1.9%). Fresh and lower resistance at 1,735-1,750 was cleared and held. A close above the latter would be a bullish signal for continued strength towards 1,760-1,775.
The Dow tested an afternoon high of 29,478 before closing at 29,420 (+0.9%). Current and lower resistance at 29,250-29,500 was recovered. A move above the latter would indicate additional upside towards 29,70-30,00 and new record highs.
The S&P 500 tapped a morning low of 3,511 before finishing at 3,545 (-0.1%). Near-term and upper support at 3,525-3,500 was breached but held. A drop below the latter would suggest further downside towards 3,475-3,450.
The Nasdaq bottomed at 11,424 shortly after the opening bell before ending at 11,553 (-1.4%). Near-term and upper support at 11,500-11,400 was tripped but held. A close below the latter would indicate additional weakness towards 11,300-11,200 and the 50-day moving average.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) closed in the red for the sixth time in seven sessions with the intraday low reaching 24.35. Current and upper support at 24.50-24 was breached but held. A close below the latter would indicate a retest towards 22.50-22.
Resistance remains at 26.50-27 followed by 27.50-28.
The Spiders Dow Jones Industrial Average ETF (NYSE: DIA) was up for the second-straight session after trading to a high of $294.96. Current and lower resistance at $294.50-$295 was cleared but held. A move above the latter would indicate a retest towards $299-$299.50 with Monday’s fresh all-time high at $299.49.
Support is at $291.50-$291. A close below the $290 level would likely indicate a further backtest towards $288-$287.50.
RSI remains in a slight uptrend with lower resistance at 65-70 getting cleared and holding. A close above the latter would signal strength towards 75 and the late August/ early June peak. Support is at 60-55.
The Communication Services Select Sector SPDR (NYSE: XLC) extended its losing streak to three-straight sessions following the intraday pullback $61.86. Near-term and upper support at $62-$61.50 was breached but held. A close below the latter keeps downside risk towards $61-$60.50 and the 50-day moving average in focus.
Lowered resistance is at $63-$63.50 followed by $64-$64.50.
RSI has leveled out with upper support at 55-50 holding. A close below the latter would signal weakness towards 45-40 and prior levels from late October. Resistance is at 60.
I could have a New Trade today so stay locked-and-loaded. In the meantime, let’s go check on our current positions.
Momentum Options Play List
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.
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 and Text Alerts.
United States Steel (X, $10.37, down $0.16)
X December 10 calls (X201218C00010000, $1.05, down $0.10)
Entry Price: $0.70 (11/6/2020)
Exit Target: $1.40, raise to $2
Stop Target: $1 (Stop Limit)
Action: The Stop Limit at $1 tripped on the stock’s pullback to $10.22.
AT&T (T, $28.85, up $0.55)
T December 28 calls (T201218C00028000, $1.25, up $0.25)
Entry Price: $0.55 (10/29/2020)
Exit Target: $1.60
Stop Target: 85 cents, raise to $1.10 (Stop Limit)
Action: Raise the Stop Limit at 85 cents to $1.10.
Fresh and lower resistance from mid-September $28.75-$29 was cleared and held with the high at $28.97. Rising support is at $28.50-$28.25.