MomentumOptions.com Pre-Market Update for 12/17/2020
Small-Caps/ Tech Trade to Another Round of Lifetime Highs
The stock market settled mostly in positive territory while hitting fresh highs as hopes for a fresh stimulus bill provided support despite a disappointing retail sales report. Senate leader Mitch McConnell has reportedly said he is optimistic a deal can be reached, supporting expectations that lawmakers can settle their differences and pass a bill before Christmas.
The Nasdaq tested an afternoon all-time peak of 12,687 while finishing at 12,658 (+0.5%). Unchartered territory and lower resistance at 12,600-12,700 was cleared and held. A move above the latter would signal continued momentum towards 12,800-12,900.
The S&P 500 ended at 3,701 (+0.2%) after trading to a high 3,711 ahead of the closing bell. Near-term and lower resistance at 3,700-3,725 was breached and held. A close above the latter and last week’s record high of 3,712 would suggest additional upside towards 3,750-3,775.
The Dow traded to a second half peak of 30,236 before closing at 30,154 (-0.2%). Current and lower resistance 30,250-30,500 was challenged but held. A move above the latter and the record high at 30,325 would suggest a possible run towards 30,750-31,000.
The Russell 2000 tapped record high of 1,966 shortly after the open before settling at 1,952 (-0.4%). Uncharted territory and lower resistance at 1,965-1,985 was cleared but held. A close above the latter would indicate continued strength towards 1,990-2,010.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) fell for the second-straight session with the intraday low tapping 22.29. Current and upper support at 22.50-22 was breached but held. A move below the latter would suggest additional weakness towards 21-20.50.
Lowered resistance is at 23.50-24 followed by 24.50-25.
The Invesco QQQ Trust (Nasdaq: QQQ) extended its winning streak to three-straight sessions after trading to an intraday all-time high of $309.79. Unchartered territory and lower resistance at $309.50-$310 was cleared but held. A close above the latter would indicate additional momentum towards $311.50-$312.
Rising support is at $307-$306.50 followed by $305.50-$305.
RSI (relative strength indicator) is 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 Technology Select Sector Spider Fund (NYSE: XLK) extended its winning streak to three-straight sessions following the late day push to $128.14 and new record peak. Fresh and lower resistance at $128-$128.50 was cleared but held. A move above the latter would signal ongoing strength towards $129.50-$130.
Current and rising support is at $127-$126.50 followed by $125.50-$125.
RSI remains in an uptrend with key resistance at 70 holding. A close above this level would signal upside towards 75-80 with the latter representing the September top. Support is at 65-60.
I have updated our current trades so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2020: 44-11 (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.
Boston Scientific (BSX, $35.13, up $0.46)
BSX February 31 puts (BSX210219P00031000, $0.55, down $0.10)
Entry Price: $0.85 (12/14/2020)
Exit Target: $1.70
Stop Target: None
Action: Shares traded to a high of $35.65 with early November and lower resistance at $35.50-$36 getting cleared but holding. Support is at $34.50-$34.
Grocery Outlet Holding (GO, $38.68, down $0.60)
GO January 40 calls (GO210115C00040000, $1.05, down $0.25)
Entry Price: $1.00 (11/30/2020)
Exit Target: $2.00
Stop Target: None
Action: Upper support at $38.50-$38 and the 200-day moving average was challenged but held on the pullback to $38.66. Resistance is at $39-$39.50.