MomentumOptions.com Pre-Market Update for 11/23/2020
Market Mixed for the Week
The stock market traded in another tight range on Friday as ongoing coronavirus concerns and renewed state restrictions weighed on sentiment. Selling pressure picked up in the final hour of trading with the lower closes for the major indexes giving the bulls and bears a split for the week.
Overbought conditions remain in play while volatility continues to signal choppy action into month end. Despite the headwinds, the major indexes remain in tight trading ranges and could be on the verge of another breakout if current support levels hold.
The Dow tested a late day low of 29,231 before ending at 29,263 (-0.8%). Current and upper support at 29,250-29,000 was tripped but held. A move below the latter would suggest a continued backtest towards 28,750-28,500.
The S&P 500 closed at 3,557 (-0.7%) after tapping a low of 3,556 ahead of the closing bell. Near-term and upper support at 3,575-3,550 failed to hold. A drop below the latter would indicate further weakness towards 3,525-3,500.
The Nasdaq traded down to 11,760 ahead of the final bell while finishing at 11,854 (-0.4%). Near-term and upper support at 11,800-11,700 was breached but held. A close below the latter would indicate ongoing weakness towards 11,600-11,500.
The Russell 2000 spent much of the session in negative territory before making a run to 1,787 while settling at 1,785 (+0.1%). Current and lower resistance at 1,785-1,800 was reclaimed. A close above the latter and the recent all-time peak of 1,805 would indicate continued momentum towards 1,820-1,840.
For the week, the S&P 500 lost 0.8% while the Dow was off 0.7%. The Russell 2000 rallied 2.4% while the Nasdaq added 0.2%.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) settled higher for the third time in four sessions despite tapping a morning low of 22.13. Current and upper support at 22.50-22 was breached but held. A close below the latter would indicate weakness towards 21.50-21 with the monthly low at 21.66.
Resistance remains at 24-24.50 followed by 25.50-26.
The SPDR S&P 500 ETF (NYSE: SPY) was down for the third time in four sessions after trading to a low of $355.25. Current and upper support at $355.50-$355 failed to hold. A close below the latter would suggest additional weakness towards $353.50-$353.
Resistance is at $357.50-$358 followed by $359.50-$360.
RSI is showing signs of rolling over with key resistance at 60 holding. A move above this level would signal a retest towards 65-70. Support is at 55-50.
The SPDR Gold Shares (NYSE: GLD) snapped a four-session slide with the intraday high reaching $176.38. Current and lower resistance at $176-$176.50 was breached but held. A close above the latter would be a more bullish signal for a retest towards $178-$178.50 and the 50-day moving average.
Support is at $175.50-$175 followed by $174-$173.50.
RSI is back in a slight uptrend with lower resistance at 45-50 holding. A close above 50 would suggest additional strength towards 55-60 with the latter representing the monthly peak. Support is at 40 and a level that has been holding since late September.
The Thanksgiving week is typically bullish for the stock market and only has three full sessions with a half day on Friday following Thursday’s holiday.
The third-quarter will continue to wind down with a number of familiar names in the spotlight. Ambarella Inc. (Nasdaq: AMBA) will kickoff next week’s reduced and lightened schedule after Monday’s closing bell and Dell Technologies Inc. (NYSE: DELL) on Tuesday. Both could have a slight impacts on how Technology trades.
There are some retailers that will also be reporting throughout the week such as Abercrombie & Fitch Co. (NYSE: ANF), Best Buy Inc. (NYSE: BBY), Burlington Stores Inc. (NYSE: BURL), Dollar Tree, Inc. (Nasdaq: DLTR), Tiffany & Co. (NYSE: TIF), and Urban Outfitters Inc. (Nasdaq: URBN).
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, $19.39, up $0.29)
UTZ January 20 calls (UTZ210115C00020000, $0.90, up $0.15)
Entry Price: $0.75 (11/19/2020)
Exit Target: $1.50
Stop Target: 30 cents
Action: Friday’s high tapped $19.50 with current and lower resistance at $19.25-$19.50 getting cleared and holding. A close above the latter would signal additional strength towards $20-$20.25. Rising support is at $19-$18.75.
Financial Select Sector Spider Fund (XLF, $27.18, down $0.24)
XLF January 28 calls (XLF210115C00028000, $0.65, down $0.15)
Entry Price: $0.75 (11/16/2020)
Exit Target: $1.50
Stop Target: 35 cents
Action: Shares tested a low of $27.18 with upper support at $27.25-$27 getting breached and failing to hold. Resistance is at $27.50-$27.75.
Freeport McMoRan (FCX, $21.25, up $0.14)
FCX December 20 calls (FCX201218C00020000, $1.80, up $0.05)
Entry Price: $1.10 (11/13/2020)
Exit Target: $2.20
Stop Target: $1.45, raise to $1.65 (Stop Limit)
Action: Raise the Stop Limit from $1.45 to $1.65 to further protect profits.
Fresh and lower resistance at $21.50-$21.75 was breached but held with Friday’s peak reaching $21.63. Support is at $21-$20.75.