MomentumOptions.com Pre-Market Update for 1/20/2021
Bulls Rebound Following 3-Day Weekend
The stock market showed strength on Tuesday as Wall Street returned from a long holiday weekend with mounting support for significant fiscal stimulus out of Washington. Comments from incoming Treasury Secretary nominee Janet Yellen helped sentiment after she stressed advocated for major fiscal action to help support the virus-stricken economy, while telling Congress to act “big” when it came to more stimulus aid.
The Nasdaq tested a late day peak of 13,206 while finishing at 13,197 (+1.5%). Current and lower resistance at 13,200-13,300 was breached but held. A move above the latter and the lifetime high at 13,220 would suggest additional strength towards 13,400-13,500.
The Russell 2000 tapped an afternoon high of 2,152 before closing at 2,151 (+1.3%). Lower resistance at 2,150-2,175 was cleared and held. A close above the latter and the all-time peak at 2,164 would indicate additional upside towards 2,170-2,190.
The S&P 500 traded to an intraday high of 3,804 before ending at 3,798 (+0.8%). Near-term and lower resistance at 3,800-3,825 was breached but held. A close above the latter and the recent all-time high of 3,826 would signal additional momentum towards 3,850-3,875.
The Dow settled at 30,930 (+0.4%) while trading to a record high of 31,086. Near-term and lower resistance at 31,000-31,250 was cleared but held. A close above the latter and the recent peak at 31,223 would suggest further upside towards 31,500-31,750.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the first time in three sessions following the intraday fade to 22.53. Near-term and upper support at 23-22.50 and the 50-day moving average were breached but held. A move below the latter would signal another retest towards 21.50-21.
Lowered resistance is 23.50-24 followed by 25.50-26.
The Invesco QQQ Trust (Nasdaq: QQQ) snapped a two-session slide with the intraday high reaching $316.93. Prior and lower resistance at $316.50-$317 was breached but held. A close above the latter would indicate momentum towards $318.50-$319 with the recent all-time peak at $319.39.
Support is at $315.50-$315 followed by $313.50-$313.
RSI (relative strength indicator) is back in an uptrend with key resistance at 60 getting challenged holding. Continued closes above this level would signal additional strength towards 65-70 with the latter representing the December top. Support is at 55-50.
The Consumer Discretionary Select Spiders (NYSE: XLY) snapped a three-session losing streak with the high reaching $167.48. Current and lower resistance is at $167-$167.50 was cleared but held. A close above the latter would likely indicate additional strength towards $168.50-$169 with last week’s all-time high at $169.17.
Support is at $166-$165.50 followed by $164.50-$164.
RSI is trying to curl higher with lower resistance at 65-70 holding. A move above the latter would suggest a retest towards 75-80 and levels from earlier this month. Support is at 60-55.
I have updated our current trades so let’s go check the tape. I could also have a new trade today so stay locked-and-loaded.
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, $30.53, up $0.73)
MGM February 34 calls (MGM210219C00034000, $0.75, up $0.10)
Entry Price: $0.80 (1/13/2021)
Exit Target: $1.60
Stop Target: None
Action: Tuesday’s high tapped $31.25 with prior and lower resistance at $31-$31.25 getting breached but holding. Fresh support is at $30.25-$30.
AT&T (T, $28.95, down $0.22)
T February 31 calls (T210219C00031000, $0.25, down $0.05)
Entry Price: $0.40 (1/6/2021)
Exit Target: $0.80
Stop Target: None
Action: Shares kissed a low of $28.90 with upper support at $29-$28.75 failing to hold. Resistance remains at $29.25-$29.50.
Boston Scientific (BSX, $36.27, down $0.06)
BSX February 31 puts (BSX210219P00031000, $0.15, flat)
Entry Price: $0.85 (12/14/2020)
Exit Target: $1.70
Stop Target: None
Action: Lower resistance at $36.75-$37 was breached but held on the trip to $36.89 and lower close. Support remains at $36-$35.75.