MomentumOptions.com Pre-Market Update for 1/15/2021
Bulls Tap Fresh Record Peaks
The stock market closed mostly lower on Thursday and ahead of President-elect Biden’s announcement after the close on his economic stimulus plans. The major indexes did tap fresh record highs, excluding the S&P 500, with the stimulus package expected to be around $2 trillion. However, the last hour of selling pressure erased much of the gains, excluding the small-caps, as traders also prepared for Friday’s earnings update from the banks ahead of the opening bell.
The Russell 2000 tapped an afternoon all-time high of 2,164 before closing at 2,155 (+2.1%). Unchartered territory and lower resistance at 2,160-2,180 was cleared and held. A close above the latter would indicate additional upside towards 2,200-2,220.
The Nasdaq tested a morning and lifetime peak of 13,220 while finishing at 13,112 (-0.1%). Fresh and lower resistance at 13,200-13,300 was breached but held. A move above the latter would suggest additional strength towards 13,400-13,500.
The Dow settled at 30,991 (-0.2%) after trading to a record high of 31,223. New and lower resistance at 31,200-31,250 was cleared but held. A close above the latter would suggest further upside towards 31,500-31,750.
The S&P 500 traded to an intraday high of 3,823 before ending lower at 3,795 (-0.04%). Key resistance at 3,825 was challenged but held. A close above this level 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) settled higher despite tapping a first half low of 21.66. Near-term and upper support at 22-21.50 was breached but held.
Lower resistance at 23-23.50 failed to hold on the bounce to 23.47 afterwards. A close above the latter and the 50-day moving average would signal a retest towards 24-24.50.
The iShares Russell Growth 1000 ETF (NYSE: IWF) was down for the third time in four sessions following the intraday pullback to $239.41. Current and upper support at $239.50-$239 was breached but held. A close below the latter would signal a retest towards $238-$237.50.
Resistance is at $241.50-$242 followed by $243.50-$244 with the recent all-time peak at $244.35.
RSI is rolling over after failing to hold upper support at 55-50 holding. A move below the latter, and a level that has been holding since early November, would suggest additional weakness towards 45-40 and levels from late October. Resistance is at 60.
The Consumer Staples Select SPDR Fund (NYSE: XLP) was down for the third time in four sessions following the pullback to $65.78. Near-term and upper support at $66-$65.50 failed to hold. A close below the latter would indicate additional weakness towards $64.50-$64.
Key resistance is at $66.50 and the 50-day moving average.
RSI remains in an downtrend with key support at 40 holding. A move below this level would suggest additional weakness towards 35-30 and levels from late October. Resistance is at 45-50.
I have updated our current trades 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.
MGM Resorts International (MGM, $30.28, up $0.24)
MGM February 34 calls (MGM210219C00034000, $0.80, up $0.05)
Entry Price: $0.80 (1/13/2021)
Exit Target: $1.60
Stop Target: None
Action: Shares tested a high of $30.47 with lower resistance at $34.25-$34.50 getting cleared and holding. Support is at $30-$29.75.
AT&T (T, $29.29, up $0.68)
T February 31 calls (T210219C00031000, $0.34, up $0.12)
Entry Price: $0.40 (1/6/2021)
Exit Target: $0.80
Stop Target: None
Action: Shares snapped a four-session slide with Thursday’s high tapping $29.76 and the options peaking at 48 cents. Prior and lower resistance at $29.75-$30 was breached but held. Support is at $29.25-$29.
Boston Scientific (BSX, $36.16, up $0.10)
BSX February 31 puts (BSX210219P00031000, $0.20, flat)
Entry Price: $0.85 (12/14/2020)
Exit Target: $1.70
Stop Target: None
Action: Lower resistance at $36.25-$36.50 was breached but held on the run to $36.46. Support is at $36-$35.75.