MomentumOptions.com Pre-Market Update for 11/20/2020
Bulls Rebound Despite Rising Jobless Claims
The stock market traded in the red throughout the first half of Thursday’s action following news Initial Jobless Claims gained 31,000 to 742,000 last week. The concern over coronavirus cases continued as New York closed the nations biggest school district with more closures coming in other major cities by Friday night.
The bounce off the lows and positive closes have the market mixed for the week with Friday’s action giving the bulls or bears the weekly win.
The Nasdaq tested an afternoon high of 11,912 while ending at 11,904 (+0.9%). 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 Russell 2000 closed on its session and peak of 1,784 (+0.8%). 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 S&P 500 finished at 3,581 (+0.4%) after reaching a late day high of 3,585. Current and lower resistance at 3,575-3,600 was cleared and held. A close above the latter would suggest additional upside towards 3,625-3,650 with the current all-time high at 3,645.
The Dow traded to an afternoon high of 29,524 before settling at 29,483 (+0.2%). Prior and lower resistance at 29,500-29,750 was breached but held. A move above the latter would suggest another run towards the 30,000 level.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) closed lower for the first time in three sessions with the intraday low tapping 22.56. Current and upper support at 23-22.50 was breached but held. A close below the latter would suggest another retest towards 22-21.50.
Resistance is at 24-24.50 followed by 25.50-26.
The Spiders Dow Jones Industrial Average ETF (NYSE: DIA) snapped a two-session slide despite trading to a first half low of $292.90. Current and upper support at $293-$292.50 was breached but held. A move below the latter would indicate further weakness towards $291-$290.50.
Resistance is at $295.50-$296 followed by $297-$297.50 with the afternoon peak reaching $295.81.
RSI has leveled out with key support at 60 holding. A close below the latter would signal additional weakness towards 55-50. Resistance is at 65-70 with the latter representing the monthly top.
The Technology Select Sector Spider Fund (NYSE: XLK) rebounded following the late day push to $121.58. Lower resistance at $121.50-$122 was cleared but held. A close above the latter would signal additional strength towards $123-$123.50.
Current support is at $120-$119.50 followed by $117.50-$117 and the 50-day moving average
RSI is back in a slight uptrend with key resistance at 60 holding. A close above this level would signal upside towards 65-70 and levels from mid-August. Support is at 55-50.
I have updated our current trades 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.
Utz Brands (UTZ, $19.10, up $0.28)
UTZ January 20 calls (UTZ210115C00020000, $0.75, up $0.10)
Entry Price: $0.75 (11/19/2020)
Exit Target: $1.50
Stop Target: 30 cents
Action: Current resistance is at $19.25-$19.50 with yesterday’s peak at $19.50. A close above the latter would signal a possible breakout towards the $20-$22 area, depending on momentum. Support is at $18.75-$18.50.
Financial Select Sector Spider Fund (XLF, $27.42, up $0.09)
XLF January 28 calls (XLF210115C00028000, $0.80, up $0.05)
Entry Price: $0.75 (11/16/2020)
Exit Target: $1.50
Stop Target: 35 cents
Action: Shares traded up to $27.45 with lower resistance at $27.50-$27.75 getting breached but holding. Support is at $27.25-$27.
Freeport McMoRan (FCX, $21.11, up $0.40)
FCX December 20 calls (FCX201218C00020000, $1.70, up $0.20)
Entry Price: $1.10 (11/13/2020)
Exit Target: $2.20
Stop Target: $1.45 (Stop Limit)
Action: Lower resistance at $21-$21.25 was recovered with Thursday’s peak at $21.17. Support is at $20.75-$20.50.