MomentumOptions.com Pre-Market Update for 12/24/2020
Small-Caps Clear 2,000 Level
The market closed mostly higher on Wednesday following a slew of economic reports and bullish news on the vaccine front. Pfizer (PFE) said it will provide 100 million additional doses to the federal government while comments from President Trump on the proposed stimulus bill lifted sentiment.
President Trump called for an increase in direct payments to $2,000 from the current $600 while trimming some of the fat on money going to other countries. Despite his remarks, expectations remain high a compromise will be reached and a bill passed in the near-term.
The Russell 2000 tested another all-time peak of 2,011 while closing at 2,007 (+0.9%). Uncharted territory and lower resistance at 2,000-2,020 was tripped and held. A close above the latter would suggest continued upside towards 2,030-2,050.
The Dow ended at 30,129 (+0.4%) while trading to an intraday high of 30,292. Near-term and lower resistance at 30,250-30,500 was breached but held. A move above the latter would indicate further strength towards 30,750-31,000 with the current record peak at 30,343.
The S&P 500 finished at 3,690 (+0.1%) with the midday peak hitting 3,711. Current and lower resistance at 3,700-3,725 was cleared but held. A close above the latter and the current lifetime high of 3,726 would signal momentum towards 3,750-3,775.
The Nasdaq settled at 12,771 (-0.3%) despite tagging a fresh record high of 12,841. New and lower resistance at 12,850-12,950 was challenged but held. A pop above the latter would suggest a continued push towards 13,000-13,100.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the second-straight with the morning low reaching 22.13. Near-term and upper support at 22.50-22 was breached but held. A move below the latter would signal additional weakness towards 21-20.50.
Resistance is 24-24.50 followed by 25.50-26 and the 50-day moving average.
The iShares Russell Growth 1000 ETF (NYSE: IWF) fell for the third time in four sessions despite testing an all-time high of $240.14. Uncharted territory and lower resistance at $240-$240.50 was breached but held. A close above the latter would signal momentum towards the $242-$242.50 area.
The fade and close at $238.21 held current and upper support at $238-$237.50. A move below the latter would signal additional weakness towards $236.50-$236. A close below the $235 level would indicate a possible near-term top.
RSI is showing signs of rolling over after key resistance at 70 held. A move above this level would suggest additional strength towards 75-80 and prior levels from early September. Support is at 60 and the monthly low.
The Health Care Select Sector SPDR Fund (NYSEArca: XLV) was unchanged with the session high hitting $111.97. Near-term and lower resistance at $111.50-$112 was breached but held. A close above the latter would signal a possible retest towards $113-$113.50 with the early November all-time high at $114.41.
Support is at $110.50-$110 with backup help at $109-$108.50 and the 50-day moving average.
RSI has flatlined with lower resistance at 55-60 holding. A close above the latter would signal additional upside towards 65-70. Key support is at 50 and a level that has been holding since mid-November.
I wanted to take the time to wish everyone a Merry Christmas with the market closed on Friday. Our next issue will be out on Monday morning.
Momentum Options Play List
Closed Momentum Options Trades for 2020: 45-11 (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, $28.75, up $0.35)
T February 30 calls (T210219C00030000, $0.55, up $0.07)
Entry Price: $0.48 (12/22/2020)
Exit Target: $1.00
Stop Target: None
Action: Shares snapped a five-session slide after trading to an intraday high of $28.83. Lower resistance at $28.75-$29 was cleared but held. A close above the latter and the 200-day moving average would be a more bullish signal of a near-term bottom. Support is at $28.50-$28.25 and the 50-day moving average.
Boston Scientific (BSX, $34.37, up $0.01)
BSX February 31 puts (BSX210219P00031000, $0.60, flat)
Entry Price: $0.85 (12/14/2020)
Exit Target: $1.70
Stop Target: None
Action: Shares traded to a high of $34.91 With lower resistance at $34.75-$35 getting cleared but holding. Support remains at $34.25-$34.