MomentumOptions.com Pre-Market Update for 1/26/2021
Market Ends Mixed in Choppy Session
The stock market was volatile ahead of a busy week that will include a number of high profile earnings, economic news, a two-day FOMC meeting and debate over the Biden administration’s $1.9 trillion stimulus proposal.
The Nasdaq traded to an opening all-time high of 13,728 while closing at 13,635 (+0.7%). Uncharted territory and lower resistance at 13,600-13,750 was cleared and held. A move above the latter would suggest additional momentum towards 13,850-14,000.
The S&P 500 settled at 3,855 (+0.4%) with the intraday peak tagging 3,859. Near-term and lower resistance at 3,850-3,875 was recovered. A close above the latter and the recent record high at 3,861 would signal additional strength towards 3,900-3,925.
The Dow finished at 30,960 (-0.1%) after tapping a low of 30,564 shortly after the opening bell. Current and upper support 30,750-30,500 was breached but held. A move below the latter would indicate further weakness towards 30,250-30,000.
The Russell 2000 traded to a lifetime high of 2,194 before closing lower at 2,163 (-0.3%). Fresh and lower resistance at 2,180-2,200 was cleared but held. A close above the latter would signal additional upside towards 2,210-2,230.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was also up for the second-straight session after soaring to an intraday high of 26.63. Prior and lower resistance from the beginning of the month at 26.50-27 was breached but held.
New support is at 23-22.50 and the 50-day moving average.
The SPDR S&P 500 ETF (NYSE: SPY) rebounded to close higher for the fourth time in five sessions despite testing an intraday low of $378.46. Mid-month and upper support at $378.50-$378 was tripped but held. A close below the latter would signal additional weakness towards $377.50-$377.
Resistance at $384.50-$385 was recovered with the high reaching $384.77 and last Thursday’s all-time peak at $384.95.
RSI is curling higher with key resistance at 70 holding. A close above this level would suggest additional strength towards 75-80 and levels from early September. Support is at 65-60.
The Spider S&P Retail ETF (NYSE: XRT) extended its winning streak to five-straight sessions following the intraday and all-time surge to $82.51. Uncharted territory and lower resistance at $82.50-$83 was cleared but held. A close above the latter would suggest additional strength towards $84.50-$85.
Support is at $75-$74.50 with a close below $72.50 signaling a false breakout.
RSI is in an uptrend with lower and overbought resistance at 80-85 getting cleared and holding. A close above the latter would suggest a run at 90. Support is at 75-70.
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.
Western Union (WU, $22.71, up $0.65)
WU March 23 calls (WU210319C00023000, $1.00, up $0.30)
Entry Price: $0.65 (1/21/2021)
Exit Target: $1.30
Stop Target: 70 cents (Stop Limit)
Action: Set an initial Stop Limit at 70 cents to start protecting profits and to avoid a loss.
Shares tagged a high of $22.75 with lower resistance at $22.50-$22.75 getting cleared and holding. Support remains at $22-$21.75 and the 50-day moving average.
MGM Resorts International (MGM, $29.98, down $1.41)
MGM February 34 calls (MGM210219C00034000, $0.60, down $0.35)
Entry Price: $0.80 (1/13/2021)
Exit Target: $1.60
Stop Target: None
Action: Upper support at $29.75-$29.50 was breached following Monday’s backtest to $29.73. Lowered resistance is at $30-$30.25.
AT&T (T, $29.11, up $0.18)
T February 31 calls (T210219C00031000, $0.25, up $0.05)
Entry Price: $0.40 (1/6/2021)
Exit Target: $0.80
Stop Target: None
Action: Shares tested a high of $29.18 with lower resistance at $29-$29.25 getting cleared and holding. Support is at $28.75-$28.50 and the 50-day moving average.
Boston Scientific (BSX, $36.78, down $0.25)
BSX February 31 puts (BSX210219P00031000, $0.10, unchanged)
Entry Price: $0.85 (12/14/2020)
Exit Target: $1.70
Stop Target: None
Action: Friday’s low reached $36.44 with upper support at $36.50-$36.25 getting breached but holding. Resistance is at $37-$37.25 and the 200-day moving average.