MomentumOptions.com Pre-Market Update for 11/27/2020
Nasdaq Sets Fresh Record High/ Profit Alert (XLF)
The market closed mostly lower on Friday following a ton of economic news that was highlighted by initial jobless claims rising 30,000 to 778,000, missing forecasts. Third quarter GDP growth was left unrevised at 33.1% from the advance report but had little impact along with another strong housing report.
The Nasdaq, however, held positive territory throughout the session while trading to another all-time high. The overall losses were hardly a dent compared to this week’s gains with a half session today to wrap up the week.
The Nasdaq tapped a final hour high of 12,114 before ending at 12,094 (+0.5%). Near-term and lower resistance at 12,100-12,200 was cleared but held. A close above the latter would indicate a possible breakout towards 12,300-12,450.
The Dow tested a morning low of 29,806 while closing at 29,872 (-0.6%). Fresh and upper support at 30,000-29,750 failed to hold. A move below the latter would suggest a continued backtest towards 29,500-29,250.
The Russell 2000 settled at 1,845 (-0.5%) with the opening low hitting 1,831. New and upper support at 1,845-1,825 was cracked but held by a smidge. A close below the latter would suggest a further pullback towards 1,805-1,785.
The S&P 500 finished at 3,629 (-0.2%) after tagging a low of 3,617. Near-term and upper support at 3,625-3,600 was breached but held. A drop below the latter would indicate further weakness towards 3,575-3,550.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) fell for the third-straight session after testing a low of 21.13. Current and upper support at 21-20.50 was challenged but easily held. A close below the 20 level and the August low of 20.28 would signal another leg higher for the stock market.
Resistance remains at 22.50-23 is followed by 24.50-25.
The Invesco QQQ Trust (Nasdaq: QQQ) extended its winning streak to three-straight sessions after trading to an afternoon high of $296.94. Near-term and lower resistance at $296.50-$297 was cleared but held. A close above the latter would indicate a retest towards $298.50-$299 with the monthly peak at $299.14.
Support is at $294.50-$294 followed by $293-$292.50.
RSI (relative strength indicator) is in an uptrend after clearing and holding lower resistance at 60-65. A close above the latter would signal additional strength towards 70-75 and levels from late August. Support is at 55-50.
The Consumer Discretionary Select Spiders (XLY) was up for the third-straight session with the intraday peak hitting $158.14. Lower resistance at $157.50-$158 was recovered. A close above the latter and Tuesday’s all-time peak at $158.21 would likely lead to a run towards $160-$160.50.
Support is at $157-$156.50 followed by $155-$155.
RSI remains in a slight uptrend with key resistance at 65 holding. A close above this level and the mid-October peak would suggest additional strength towards 70-75. Support is at 60.
I have updated our current trades, including a Profit Alert for XLF, and our 13th-straight winning trade since mid-August.
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, $19.85, down $0.29)
UTZ January 20 calls (UTZ210115C00020000, $1.10, down $0.15)
Entry Price: $0.75 (11/19/2020)
Exit Target: $1.50
Stop Target: 85 cents (Stop Limit)
Action: Shares tested a low of $19.77 fresh and upper support at $19.75-$19.50 getting challenged but holding. Resistance is at $20.25-$20.50.
Financial Select Sector Spider Fund (XLF, $28.56, down $0.10)
XLF January 28 calls (XLF210115C00028000, $1.35, down $0.10)
Entry Price: $0.75 (11/16/2020)
Exit Target: $1.50, raise to $2.50
Stop Target: $1.25 (Stop Limit)
Action: The Stop Limit at $1.25 tripped with shares testing a low of $28.22 and the call kissing $1.14.
We can look on a reentry point if shares can clear and hold $28.75. A break below $28 would signal a near-term top.
Freeport McMoRan (FCX, $23.54, up $0.43)
FCX December 20 calls (FCX201218C00020000, $3.70, up $0.40)
Entry Price: $1.10 (11/13/2020)
Exit Target: $3.75, raise to $4.75 (closed half at $2.75 on 11/24)
Stop Target: $2.90, raise to $3.45 (Stop Limit)
Action: Raise the Exit Target from $3.75 to $4.75 on the other half of the trade.
Raise the Stop Limit from $2.90 to $3.45 to further protect profits.
Fresh and lower resistance at $23.50-$23.75 was breached and held with Wednesday’s 52-week peak reaching $23.66. Fresh support is at $23.25-$23.
RSI is above 80 and is indicating shares are overbought.