MomentumOptions.com Pre-Market Update for 1/27/2021
S&P 500 Hits Record High on Lower Closes
The stock market was tentative throughout Tuesday’s session before closing lower as investors braced for a number of high profile earnings after the close and the start of Fed’s two-day policy meeting. The S&P did manage to test a fresh intraday all-time high while volatility continues to hold a key level a resistance after also closing in the red.
The Russell 2000 tested a midday low of 2,146 before ending at 2,149 (-0.6%). Current and upper support at 2,150-2,125 failed to hold. A close below the latter would signal a continued backtest towards 2,100-2,075.
The S&P 500 finished at 3,849 (-0.2%) despite tagging an intraday record high of 3,870. The low reached 3,847 afterwards with near-term and upper support at 3,850-3,825 failing to hold. A move below the latter would suggest additional weakness towards 3,800-3,775.
The Nasdaq settled at 13,626 (-0.1%) following the first half fade to 13,603. Current and upper support at 13,600-13,500 was challenged but held. A drop below the latter would indicate a further retest towards 13,400-13,300.
The Dow closed at 30,937 (-0.1%) after tagging a low of 30,921 while trading in a 200-point range. Near-term and upper support 30,750-30,500 easily held. A move below the latter would signal additional weakness towards 30,250-30,000.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) had its two-session winning streak snapped following the intraday backtest to 22.55. Current and upper support at 23-22.50 was recovered. A close below the latter and the 50-day moving average would indicate a retest towards 21.50-21.
Resistance is at 24-24.50.
The iShares Russell Growth 1000 ETF (NYSE: IWF) was down for the second time in six sessions despite tagging an intraday peak of $250.21. Current and lower resistance at $250-$250.50 was breached but held. A close above the latter and Monday’s all-time peak at $250.70 would signal strength towards $251.50-$252.
Support is at $248.50-$248 followed by $245.50-$245.
RSI is showing signs of rolling over with key resistance at 70 holding. A move above this level would suggest additional strength towards 75-80 and overbought highs from early September. Support is at 65-60.
The Energy Select Sector SPDR Fund (NYSE: XLE) extended its losing streak to four-straight sessions after tagging a low of $40.73. Key support at $41 was breached and failed to hold. Continued closes below this level would suggest additional weakness towards $40-$39.50 and the 50-day moving average.
Resistance is at $42-$42.50.
RSI remains in a downtrend with key support at 50 failing to hold. Continued closes below this level would signal weakness towards 45-40 and the early November lows. Resistance is at 55-60.
I have updated our current trades and I could 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.
Western Union (WU, $22.83, up $0.12)
WU March 23 calls (WU210319C00023000, $1.10, up $0.10)
Entry Price: $0.65 (1/21/2021)
Exit Target: $1.30
Stop Target: 70 cents, raise to 80 cents (Stop Limit)
Action: Raise the Stop Limit at 70 cents to 80 cents.
Shares tapped a high of $23.03 with new and lower resistance at $23-$23.25 getting cleared but holding. Support is at $22.50-$22.25.
MGM Resorts International (MGM, $29.59, down $0.39)
MGM February 34 calls (MGM210219C00034000, $0.50, down $0.10)
Entry Price: $0.80 (1/13/2021)
Exit Target: $1.60
Stop Target: None
Action: Tuesday’s low kissed $29.54 with upper support at $29.75-$29.50 and the 50-day moving average failing to hold. Lowered resistance is at $30-$30.25.
AT&T (T, $29.75, up $0.64)
T February 31 calls (T210219C00031000, $0.40, up $0.15)
Entry Price: $0.40 (1/6/2021)
Exit Target: $0.80
Stop Target: None
Action: Earnings out due out this morning.
Shares surged a high of $29.84 with prior and lower resistance at $29.75-$30 getting cleared and holding. Fresh support is at $29.50-$29.25.
Boston Scientific (BSX, $36.64, down $0.14)
BSX February 31 puts (BSX210219P00031000, $0.10, unchanged)
Entry Price: $0.85 (12/14/2020)
Exit Target: $1.70
Stop Target: None
Action: Yesterday’s low reached $36.49 with upper support at $36.50-$36.25 getting breached but holding for the 2nd-straight session. Resistance remains at $37-$37.25 and the 200-day moving average.