MomentumOptions.com Pre-Market Update for 12/4/2020
Nasdaq and S&P Tag Record Peaks
The stock market showed strength throughout much of Thursday’s session following news after a coronavirus aid compromise was within reach and could be passed ahead of the holidays. The S&P 500 and Nasdaq set another round of record highs with the small-caps and blue-chips just missing the mark by single-digits.
However, selling pressure in the final hour of trading returned following news that Pfizer (PFE) now expects to ship just half of the coronavirus vaccine doses it originally planned for this year because of supply-chain problems. The major indexes settled well off their highs but remain near the top of their trading ranges.
The Russell 2000 tapped an intraday high of 1,860 while closing at 1,848 (+0.6%). Lower resistance at 1,850-1,870 was cleared but held. A move above the latter and the all-time high at 1,862 would indicate continued upside towards 1,880-1,900.
The Dow traded to an afternoon peak of 30,110 before finishing at 29,969 (+0.3%). Near-term and lower resistance 30,000-30,250 was breached but held. A close above the latter and the record high at 30,116 would suggest momentum towards 30,500-30,750.
The Nasdaq settled at 12,377 (+0.2%) after testing a morning high of 12,439. Near-term and lower resistance at 12,400-12,500 was topped but held. A pop above the latter would signal continued record highs towards 12,600-12,700.
The S&P 500 ended at 3,666 (-0.1%) after topping out at 3,682. Current and lower resistance at 3,675-3,700 was breached but held. A close above the latter would suggest additional strength towards 3,725-3,750.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the third-straight session after trading in a tight range with the intraday low reaching 20.72. Current and upper support at 20.50-20 was challenged but held. A close below the latter would indicate a further pullback towards 19.50-19.
Resistance remains at 21.50-22 followed by 22.50-23.
The iShares Russell Growth 1000 ETF (NYSE: IWF) was down for the 2nd-straight session despite tapping an intraday high of $234.55. Lower resistance at $234.50-$235 was cleared but held. A close above the latter would and the all-time peak at $234.76 would signal a possible triple-top breakout towards $237-$237.50.
Current support is at $232.50-$232 followed by $231-$230.50.
RS has leveled out with lower resistance at 65-70 holding. A move above the latter would suggest additional strength towards 75-80 and prior levels from early September. Key support is at 60.
The Energy Select Sector SPDR Fund (NYSE: XLE) extended its winning streak to three-straight sessions with the midday peak hitting $39. Near-term and lower resistance at $38.50-$39 was cleared and held. A close above the latter would suggest additional strength towards $39.50-$40 with the late November high at $40.42.
Current support is at $38-$37.50 followed by $37-$36.50.
RSI is in an uptrend with lower resistance at 65-70 holding. A close above the latter would signal strength towards 75 and the November top. Support is at 60.
I have updated our current trades so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2020: 43-11 (80%). 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.
AT&T (T, $29.23, up $0.14)
T January 30 calls (T210115C00030000, $0.40, unchanged)
Entry Price: $0.40 (12/3/2020)
Exit Target: $0.80
Stop Target: None
Action: Thursday’s peak reached $29.24 with lower resistance at $29.25-$29.50 holding on the close back above the 200-day moving average. Support os at $29-$28.75.
Grocery Outlet Holding (GO, $37.27, down $0.35)
GO January 40 calls (GO210115C00040000, $0.90, down $0.10)
Entry Price: $1.00 (11/30/2020)
Exit Target: $2.00
Stop Target: None
Action: Upper support at $37.25-$37 was breached but held with the low tapping the latter. Resistance is at $37.50-$38 and the 200-day moving average.