MomentumOptions.com Pre-Market Update for 12/8/2020
Tech Continues to Shine Despite Profit Taking
The stock market closed mostly lower on Monday despite Tech and the small-caps setting fresh intraday lifetime highs as the lack of economic and earnings news weighed on sentiment. Continued good news on coronavirus vaccines and delivery dates helped offset some of the mild profit taking following Friday’s closes on the previous all-time highs.
The Nasdaq ended at 12,519 (+0.5%) with the session peak hitting 12,536. Unchartered territory and lower resistance at 12,500-12,600 was breached and held. A close above the latter would signal continued record highs towards 12,700-12,800.
The Russell 2000 finished at 1,891 (-0.1%) after tapping an intraday lifetime high of 1,897. New and lower resistance at 1,900-1,920 was challenged but held. A move above the latter would indicate continued strength towards 1,940-1,960.
The S&P 500 settled at 3,691 (-0.2%) after tagging a low of 3,678. Current and upper support at 3,675-3,650 was approached but held. A drop below the latter would indicate further weakness towards 3,625-3,600.
The Dow tested an afternoon low of 29,967 while closing at 30,069 (-0.5%). Near-term and upper support at 30,000-29,750 was breached but held. A move below the latter would suggest a further backtest towards 29,500-29,250.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the fourth time in five sessions after trading to an intraday peak of 22.62. Prior and lower resistance at 22.50-23 was tripped but held. A close above the latter would signal a retest towards 23.50-24.
Current support is at 21-20.50 followed by 20-19.50.
The Invesco QQQ Trust (Nasdaq: QQQ) extended its winning streak to 10-straight sessions after trading to an intraday all-time high of $307.63. Unchartered territory and lower resistance at $307.50-$308 was cleared but held. A close above the latter would indicate additional momentum towards $309.50-$310.
Rising support is at $305.50-$305 followed by $303.50-$303.
RSI (relative strength indicator)remains in an uptrend with key resistance at 70 holding. A close above this level would signal additional strength towards 75-80 and levels from early September. Support is at 65-60.
The Utilities Select Spider Fund (NYSE: XLU) was up for the first time in three sessions after testing a morning high of $63.06. Near-term and lower resistance at $63-$63.50 was breached but held. A close above the latter and the 50-day moving average would signal further strength towards $64-$64.50.
Support is at $62-$61.50 followed by $60.50-$60.
RSI is back in an uptrend with lower resistance at 45-50 holding. Support is at 40.
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, $29.64, up $0.10)
T January 30 calls (T210115C00030000, $0.60, up $0.05)
Entry Price: $0.40 (12/3/2020)
Exit Target: $0.80
Stop Target: 45 cents (Stop Limit)
Action: Set an initial Stop Limit at 45 cents to start protecting profits and ro avoid a loss.
Monday’s high kissed $29.78 with lower resistance at $29.75-$30 getting breached but holding. Support is at $29.50-$29.25 and the 200-day moving average.
Grocery Outlet Holding (GO, $37.78, up $0.28)
GO January 40 calls (GO210115C00040000, $0.95, up $0.05)
Entry Price: $1.00 (11/30/2020)
Exit Target: $2.00
Stop Target: None
Action: Lower resistance at $37.75-$38.25 and the 200-day moving average was reclaimed with Monday’s high tapping $38. Support at $37.25-$36.75.