MomentumOptions.com Pre-Market Update for 1/14/2021
Indexes Trade in Tight Ranges to End Mixed
The stock market closed mixed on Wednesday and ahead the House vote to impeach President Trump for the second time. The ongoing political drama comes ahead of President-elect Biden’s administration stimulus proposals and the promise of the vaccine to allow a return to normal activities in the second half of this year.
The Nasdaq traded to an intraday high of 13,171 while closing at 13,128 (+0.4%). Current and lower resistance at 13,100-13,225 was cleared and held. A close above the latter and the all-time high at 13,208 would indicate additional strength towards 13,250-13,375.
The S&P 500 tested a morning peak of 3,820 before finishing at 3,809 (+0.04%). Near-term and lower resistance at 3,825-3,850 was challenged but held. A close above the latter and the recent all-time high of 3,826 would signal additional momentum towards 3,875-3,900.
The Dow ended at 31,060 (-0.03%) despite trading to a high of 31,153. 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 Russell 2000 kissed a morning all-time high of 2,130 before closing lower at 2,111 (-0.8%). Fresh and lower resistance at 2,130-2,150 was cleared but held. A close above the latter would indicate additional upside towards 2,160-2,180.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) fell for the second-straight session with the intraday low tapping 21.92. Current and upper support at 22-21.50 was breached but held. A drop below the latter would indicate another retest towards the 20.50-20 area.
Resistance is at 23.50-24 and the 50-day moving average.
The SPDR S&P 500 ETF (NYSE: SPY) showed strength for the second-straight session and closed up for the sixth time in seven after testing a morning peak of $380.86. Near-term and lower resistance at $380.50-$381 was cleared but held. A close above the latter would signal a run towards $381.50-$382 with last Friday’s all-time high at $381.49.
Support is at $379-$378.50 followed by $377.50-$376.
RSI is trying to curl higher with key resistance at 70 holding. A close above this level would suggest additional strength towards 75-80 and the late August/ early September highs. Support is at 65-60.
The SPDR Gold Shares (NYSE: GLD) fell for the fifth time in six sessions after trading to a late day low of $173.05. Near-term and upper support at $173.50-$173 was breached and failed to hold. A close below the latter would signal another retest towards $172.50-$172 and the 200-day moving average.
Resistance is at $174.50-$175 and the 50-day moving average.
RSI is in a slight downtrend with upper support at 45-40 failing to hold. A close below the latter would suggest additional weakness towards 35-30 and levels from late November. Resistance is at 50.
I have a Profit Alert this morning, our 18th-straight winning trade since mid-August, so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2021: 2-0 (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, $28.61, down $0.14)
T February 31 calls (T210219C00031000, $0.22, down $0.03)
Entry Price: $0.40 (1/6/2021)
Exit Target: $0.80
Stop Target: None
Action: Shares fell for the fourth-straight session with yesterday’s low tapping $28.61. Current and upper support at $28.75-$28.50 was breached and failed to hold. 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, $45.36, up $0.43)
CSCO February 48 calls (CSCO210219C00048000, $0.70, down $0.15)
Entry Price: $0.60 (12/28/2020)
Exit Target: $1.20
Stop Target: 70 cents (Stop Limit)
Action: The Stop Limit at 70 cents was tripped on yesterday’s pullback to $45.18.
Boston Scientific (BSX, $36.06, up $0.73)
BSX February 31 puts (BSX210219P00031000, $0.20, down $0.05)
Entry Price: $0.85 (12/14/2020)
Exit Target: $1.70
Stop Target: None
Action: Lower resistance at $36-$36.25 was recovered on the rebound to $36.18. Support is at $35.50-$35.25 and the 50-day moving average.