MomentumOptions.com Pre-Market Update for 12/1/2020

Market Slips on Profit Taking/ Profit Alert (FCX)

8:00am (EST)

The stock market fell on Monday after Tech set another record high as investor took profits to close out the month. Mixed economic reports outweighed more good news concerning coronavirus vaccines as Moderna (MRNA) announced it will apply for emergency use in the U.S. and Europe.

The Russell 2000 settled at 1,819 (-1.9%) with the opening low hitting 1,813. Fresh and upper support at 1,820-1,800 failed to hold. A close below the latter would suggest a further pullback towards 1,790-1,770.

The Dow tested a morning low of 29,463 while closing at 29,638 (-0.9%). Near-term and upper support at 29,750-29,500 was breached and failed to hold. A move below the latter would suggest a continued backtest towards 29,250-29,000.

The S&P 500 finished at 3,621 (-0.5%) after tagging a low of 3,594. Current and upper support at 3,600-3,575 was breached but held. A drop below the latter would indicate further weakness towards 3,550-3,525.

The Nasdaq traded down to 12,027 while finishing at 12,198 (-0.1%). New and upper support at 12,100-12,000 was tripped but held. A close below the latter would signal a further pullback towards 11,900-11,800.

For the month, the Russell 2000 zoomed 18% and the Dow jumped 11.9%. The Nasdaq surged 11.8% and the S&P 500 rallied 10.8%.

The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) snapped a four-session slide after after tagging a morning high of 22.89. Prior and lower resistance at 22.50-23 was tripped but held. A close above the latter would signal a retest towards 24-24.50

Current support is at 20-19.50.

The Spider Small-Cap 600 ETF (NYSE: SLY) extended its losing streak to three-straight sessions after closing on its session low of $73.70. Upper support at $74-$73.50 was breached and failed to hold. A close below the latter would be an ongoing bearish signal for additional weakness towards $72.50-$72.

Lowered resistance is at $75-$75.50 followed by $76-$76.50.

RSI (relative strength indicator) is in a downtrend with upper support at 65-60 failing to hold. A move below the latter would indicate additional weakness towards 55-50 and prior levels from the beginning of the month. Resistance is at 70.

The SPDR S&P Homebuilders ETF (NYSEArca: XHB) extended its losing streak to four-straight sessions following the intraday pullback to $56.40. Near-term and upper support at $56.50-$56 was breached but held. A close below the latter would signal additional downside risk towards $55.50-$55 and the 50-day moving average.

Resistance is at $58-$58.50.

RSI remains in a downtrend with upper support at 55-50 holding. A drop below the latter would suggest additional weakness towards 45-40. Key resistance is at 60 and the monthly peak.

The other half of the FCX trade was closed yesterday for a 182% return, our 12th triple-digit winner for 2020 and 13th-straight winning trade since mid-August.

Momentum Options Play List

Closed Momentum Options Trades for 2020: 42-11 (79%). 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.

Grocery Outlet Holding (GO, $38.62, up $0.78)

GO January 40 calls (GO210115C00040000, $1.45, up $0.45)

Entry Price: $1.00 (11/30/2020)
Exit Target: $2.00
Return: 45%
Stop Target: None

Action: Prior and lower resistance at $38.75-39 was cleared but held with Monday’s peak reaching $38.85. Support is at $38.25-$38 and the 200-day moving average.

Utz Brands (UTZ, $20.18, down $0.01)

UTZ January 20 calls (UTZ210115C00020000, $1.15, flat)

Entry Price: $0.75 (11/19/2020)
Exit Target: $1.50
Return: 53%
Stop Target: 85 cents (Stop Limit)

Action: Shares tested a high of $20.35 lower resistance at $20.25-$20.50 getting cleared but holding. Support is at $19.75-$19.50.

Freeport McMoRan (FCX, $23.39, down $0.13)

FCX December 20 calls (FCX201218C00020000, $3.50, down $0.10)

Entry Price: $1.10 (11/13/2020)
Exit Target: $3.75, raise to $4.75 (closed half at $2.75 on 11/24)
Return: 182%
Stop Target: $3.45 (Stop Limit)

Action: The Stop Limit at $3.45 on the other half of the trade triggered on the pullback to $23.01 yesterday.