MomentumOptions.com Pre-Market Update for 1/13/2021
Small-Caps Tag Fresh Record High
The stock market traded on both sides of the ledger before closing higher on Tuesday and ahead of a congressional vote on a resolution that calls for Vice President Pence to invoke the 25th amendment and removing President Trump from office.
The vaccine continues to be rolled out in the U.S. amid ongoing and rising coronavirus cases but the pace in some cities has been slower than anticipated and continues to weigh on sentiment.
The Russell 2000 tapped an afternoon all-time high of 2,128 before closing at 2,127 (+1.8%). Unchartered territory and lower resistance at 2,120-2,140 was cleared and held. A close above the latter would indicate additional upside towards 2,160-2,180.
The Nasdaq tested a late day peak of 13,105 while finishing at 13,073 (+0.3%). Current and lower resistance at 13,100-13,225 was breached but held. A move above the latter and the lifetime high at 13,208 would suggest additional strength towards 13,250-13,375.
The Dow settled at 31,068 (+0.2%) while trading to a record high of 31,114. Near-term and lower resistance at 31,100-31,300 was cleared but held. A close above the latter and the recent peak at 31,193 would suggest further upside towards 31,500-31,700.
The S&P 500 traded to an intraday high of 3,810 before ending at 3,801 (+0.04%). Near-term and lower resistance at 3,800-3,825 was recovered. A close above the latter and the recent all-time high of 3,826 would signal additional momentum towards 3,850-3,875.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the fifth time in six sessions despite tapping a midday peak of 25.15. Near-term and lower resistance at 25-25.50 was breached but held.
The fade to 22.83 and close back below the 50-day moving average afterwards tripped but held current and upper support at 23-22.50.
The Spiders Dow Jones Industrial Average ETF (NYSE: DIA) rebounded after trading to an afternoon high of $311.25. Current and lower resistance at $311-$311.50 was cleared but held. A move above the $312 level and last week’s peak at $311.98 would signal a possible breakout towards the $313.50-$314 area.
Support is at $309-$308.50 followed by $307.50-$307.
RSI is back in a slight uptrend with key resistance at 70 holding. A close above this level and the early November peak would suggest strength towards 75 and late August/ early September top. Support is at 65-60.
The Technology Select Sector Spider Fund (NYSE: XLK) was down for the second-straight session following the intraday pullback to $127.83. Near-term and upper support at $128-$127.50 was breached but held. A move below the latter would signal ongoing weakness towards $126.50-$126.
Resistance is at $129.50-$130.
RSI remains in a downtrend with upper support at 55-50 holding. A close below the latter would signal additional weakness towards 45-40 and levels from late October. Resistance is at 60-65.
I have updated our current positions so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2021: 1-0 (100%). 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, down $0.12)
T February 31 calls (T210219C00031000, $0.25, down $0.02)
Entry Price: $0.40 (1/6/2021)
Exit Target: $0.80
Stop Target: None
Action: Shares tapped a low of $28.51 with upper support at $28.75-$28.50 getting breached but holding. Resistance remains at $29-$29.25.
The technical setup still looks good with the 50-day moving average above the 200-day moving average. This is known as a golden cross and typically leads to higher highs.
Cisco Systems (CSCO, $45.79, up $0.43)
CSCO February 48 calls (CSCO210219C00048000, $0.85, up $0.10)
Entry Price: $0.60 (12/28/2020)
Exit Target: $1.20
Stop Target: 62 cents, raise to 70 cents (Stop Limit)
Action: Raise the Stop Limit at 62 cents to 70 cents to further lock-in profits on a pullback.
Shares tagged a high of $45.92 with lower resistance at $45.75-$46 getting cleared and holding. Support is at $45.25-$45.
Boston Scientific (BSX, $35.33, down $1.11
BSX February 31 puts (BSX210219P00031000, $0.25, up $0.05)
Entry Price: $0.85 (12/14/2020)
Exit Target: $1.70
Stop Target: None
Action: Prior and upper support from late December at $34.75-$34.50 and the 50-day moving average was breached but levels that held on the backtest to $34.58. Lowered resistance at $35.50-$35.75.