MomentumOptions.com Pre-Market Update for 11/17/2020

Bulls Keep Momentum on Continued Vaccine Hopes

8:00am (EST)

Wall Street closed higher on Monday on fresh record highs after Moderna (MRNA) became the latest major drug-maker to announce positive data for its coronavirus vaccine candidate. The company said its vaccine is 94.5% effective based on early results but the logistical challenge of manufacturing and distribution remains a slight unknown.

The Russell 2000 closed on its session and record peak of 1,785 (+2.4%). Unchartered territory and lower resistance at 1,785-1,800 was cleared and held. A close above the latter would indicate continued momentum towards 1,820-1,840.

The Dow traded to an afternoon and lifetime high of 29,964 before settling at 29,950 (+1.6%). Prior and lower resistance from February at 29,750-30,000 was breached and held. A move above the latter would suggest additional strength towards 30,250-30,500.

The S&P 500 finished at 3,626 (+1.2%) after reaching a late day peak of 3,628. New and lower resistance at 3,625-3,650 was cleared but held. A close above the latter would suggest additional upside towards 3,675-3,700 with the current all-time high at 3,645.

The Nasdaq tested a morning high of 11,937 while ending at 11,924 (+0.8%). Near-term and lower resistance at 11,900-12,000 was recovered. A move above the latter would signal another retest towards 12,000-12,100 with the current lifetime peak at 12,108.

The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the second-straight session after testing a late afternoon low of 22.43. Current and upper support at 23-22.50 was breached and held. A close below the latter would suggest further weakness towards 22-21.50 and levels from late August.

Lowered resistance is at 24-24.50 followed by 25.50-26.

The Invesco QQQ Trust (Nasdaq: QQQ) extended its winning streak to two-straight sessions after trading to a morning peak of $293.51. Near-term and lower resistance at $293.50-$294 was cleared but held. A close above the latter would indicate a retest towards $295-$295.50.

Support is at $290-$289.50 followed by $288-$287.50.

RSI (relative strength indicator) is in an uptrend after clearing and holding lower resistance at 55-60. A close above the latter would signal additional strength towards 65-70 and levels from mid-August. Key support is at 50.

The Industrials Select Sector SPDR Fund (NYSE: XLI) was up for the second-straight session with the intraday and all-time high tapping $87.99. Current and lower resistance at $87.50-$88 was cleared and held. A close above the latter would be a bullish signal for breakout potential towards $89.50-$90.

Support is at $87-$86.50 followed by $85.50-$85.

RSI is in a slight uptrend with resistance at 70 holding. Continued closes above this level would suggest ongoing strength towards 75 and the early August top. Support is at 65-60.

I have updated our current positions so let’s go check the tape.

Momentum Options Play List

Closed Momentum Options Trades for 2020: 40-11 (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.

Financial Select Sector Spider Fund (XLF, $27.63, up $0.60)

XLF January 28 calls (XLF210115C00028000, $0.85, up $0.25)

Entry Price: $0.75 (11/16/2020)
Exit Target: $1.50
Return: 13%
Stop Target:

Action: We got filled at our Limit Price of 75 cents shortly after yesterday’s open. Shares tested a multi-month high of $27.73 with prior and lower resistance at $27.50-$27.75 getting cleared and holding. Fresh support is at $27.25-$27.

Freeport McMoRan (FCX, $21.00, up $0.86)

FCX December 20 calls (FCX201218C00020000, $1.70, up $0.45)

Entry Price: $1.10 (11/13/2020)
Exit Target: $2.20
Return: 54%
Stop Target: 80 cents, raise to $1.45 (Stop Limit)

Action: Raise the Stop Target from 80 cents to $1.45 and make it a Stop Limit to start protecting profits.

Monday’s peak reached $21.01 with fresh and lower resistance at $21-$21.25 getting cleared and holding. A close above the latter and the recent 52-week peak at $21.29 would signal additional upside towards $21.50-$22. Rising support is at $20.75-$20.50.