MomentumOptions.com Pre-Market Update for 11/24/2020
Small-Caps Tap Another All-Time High
The stock market rebounded on Monday following the 3rd-straight week of a positive announcement concerning coronavirus. AstraZeneca (AZN) said that its vaccine is up to 90% effective but slightly below the 95% effective rates from the previous companies that have reported updates.
The small-caps tapped a new record high while Tech was more volatile after trading on both sides of the ledger. The shortened week was met with lessened volume and light economic news with more important impact headlines coming on Wednesday.
The Russell 2000 tapped an afternoon and all-time high of 1,827 before settling at 1,818 (+1.9%). Unchartered territory and lower resistance at 1,825-1,845 was cleared but held. A close above the latter would indicate continued momentum towards 1,850-1,870.
The Dow traded to an afternoon peak of 29,667 before finishing at 29,591 (+1.1%). Prior and lower resistance 29,500-29,750 was breached and held. A move above the latter would suggest another run at the 30,000 level.
The S&P 500 ended at 3,577 (+0.6%) after trading to a high of 3,589 shortly after the open. Current and lower resistance at 3,575-3,600 was recovered. A close above the latter would suggest additional upside towards 3,625-3,650 with the current all-time high at 3,645.
The Nasdaq tested a morning high of 11,949 while finishing at 11,880 (+0.2%). Near-term and lower resistance at 11,900-12,000 was cleared but held. A move above the latter would signal another retest towards 12,000-12,100 with the current record peak at 12,108.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) fell for the second time in three sessions with the intraday low tapping 22.45. Current and upper support at 22.50-22 was cracked but held. A close below the latter would suggest another retest towards 21.50-21 with last week’s monthly low at 21.66.
Resistance remains at 24-24.50 followed by 25.50-26.
The iShares Russell Growth 1000 ETF (NYSE: IWF) rebounded despite tagging an intraday low of $223.94. Near-term and upper support at $224-$223.50 was breached but held. A close below the latter would indicate further weakness towards $222.50-$222.
Resistance is at $227.50-$228 followed by $229.50-$230.
RS has leveled out with lower resistance at 55-60 holding. A move above the latter and monthly peak would suggest additional strength towards 65-70 and prior levels from the first half of August. Key support is at 50.
The Consumer Staples Select SPDR Fund (NYSE: XLP) finished slightly higher despite the intraday pullback to $66.11. Near-term and upper support at $66.50-$66 was breached but held. A close below the latter would indicate additional weakness towards $65-$64.50 and the 50-day moving average.
Lower resistance at $67-$67.50 was challenged but held on the bounce to $66.72 afterwards.
RSI is trying to flatten out after holding upper support at 55-50. Resistance is at 60 with a move above this level signaling a retest towards 65-70.
I have made adjustment to FCX to further protect profits. Hopefully, we can squeeze a little more out of this trade to give us our 13th triple-digit winner for the year. I could also have new trades today so stay locked-and-loaded.
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, $19.55, up $0.16)
UTZ January 20 calls (UTZ210115C00020000, $1.00 up $0.10)
Entry Price: $0.75 (11/19/2020)
Exit Target: $1.50
Stop Target: 50 cents
Action: Shares tested a high of $20 with fresh and lower resistance at $20-$22.25 getting cleared but holding. A close above the latter would signal additional momentum towards $20.75-$21. Support is at $19.25-$19.
There was a flurry of activity in the UTZ January 22.50 calls UTZ210115C00022500, $0.40, up $0.05) on Monday and this is a good signal traders are expecting higher highs.
Financial Select Sector Spider Fund (XLF, $27.69, up $0.51)
XLF January 28 calls (XLF210115C00028000, $0.85, up $0.20)
Entry Price: $0.75 (11/16/2020)
Exit Target: $1.50
Stop Target: 35 cents
Action: Shares tested a high of $27.77 with lower resistance at $27.75-$28 getting cleared but holding. Support is at $27.50-$27.25.
The XLF January 29 and 30 calls had volume north of 3,000 contracts yesterday and is also a good signal for higher highs.
Freeport McMoRan (FCX, $21.91, up $0.66)
FCX December 20 calls (FCX201218C00020000, $2.20, up $0.40)
Entry Price: $1.10 (11/13/2020)
Exit Target: $2.20, raise to $2.75 (Limit Order on half)
Stop Target: $1.65, raise to $1.80 (Stop Limit)
Action: Raise the Exit Target from $2.20 to $2.75 with a Limit Order on half. Raise the Stop Limit from $1.65 to $1.80 to further protect profits.
Fresh and lower resistance at $21.75-$22 was breached and held with Monday’s 52-week peak reaching $21.93. New support is at $21.50-$21.25.