MomentumOptions.com Pre-Market Update for 2/4/2021
Bulls Extend Overall Winning Streak to 3-Straight Sessions
The stock market showed overall strength on Wednesday following better-than-expected earnings from a number of companies, specifically in the Tech sector. However, the Nasdaq actually closed slightly lower after spending much of the session in positive territory.
The mostly higher closes have the major averages within striking distance of another round of all-time highs ahead of Friday’s key update on jobs.
The Russell 2000 tagged an afternoon high of 2,163 before settling at 2,159 (+0.4%). Near-term and lower resistance at 2,160-2,180 was cleared but held. A close above the latter would indicate additional upside towards 2,170-2,190 with the all-time high at 2,194. Below is a chart of the IWM.
The Dow closed at 30,723 (+0.1%) after tapping an intraday peak of 30,793. Near-term and lower resistance at 30,750-31,000 was cleared but held. A close above the latter would signal a retest towards 31,250-31,500 with January’s record peak at 31,272.
The S&P 500 reached a second half peak of 3,847 before ending at 3,830 (+0.1%). Current and lower resistance at 3,850-3,875 was challenged but held. A close above the latter and the recent all-time high at 3,870 would indicate additional strength towards 3,900-3,925.
The Nasdaq tested an intraday peak of 13,723 while finishing at 13,610 (-0.02%). Key resistance at 13,700 was cleared but held. Continued closes above this level and the current lifetime high at 13,728 would suggest a breakout towards 13,800-13,900.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) extended its losing streak to three-straight sessions after closing on the session low of 22.91 and back below the 50-day moving average. Prior and upper support at 23-22.50 were recovered. A move back below the latter would signal additional weakness towards 21.50-21.
Lowered resistance is at 24.50-25 followed by 27-27.50 and the 200-day moving average.
The SPDR S&P 500 ETF (NYSE: SPY) was up for the third-straight session after trading to an intraday high of $383.70. Near-term and lower resistance at $383.50-$384 was cleared but held. A close above the latter would indicate a continued run towards $385-$385.50 with the current all-time peak at $385.85.
Rising support is at $380.50-$380.
RSI is showing signs of leveling out with lower resistance at 55-60 getting cleared and holding. A close above the latter would suggest additional strength towards 65-70. Support is at 50-45.
The iShares MSCI Emerging Markets ETF (NYSE: EEM) extended its winning streak to three-straight sessions after tagging an intraday peak of $55.95. Current and lower resistance at $55.50-$56 was reclaimed. A move above the latter would be an ongoing bullish signal for additional strength towards $56.50-$57 with the current all-time high at $56.54.
Support is at $55-$54.50.
RSI is in an uptrend with key resistance at 60 getting cleared and holding. Continued closes above this level would indicate strength towards 65-70. Support is at 55-50.
I could have a New Trade today so stay locked-and-loaded. In the meantime, let’s go check on the current action.
Momentum Options Play List
Closed Momentum Options Trades for 2021: 3-1 (75%). 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.
Bank of America (BAC, $31.58, up $0.55)
BAC March 32 calls (BAC210319C00032000, $1.15, up $0.15)
Entry Price: $0.65 (2/2/2021)
Exit Target: $1.30
Stop Target: None
Action: Shares reached a peak of $31.73 with prior and lower resistance from early January at $31.50-$31.75 getting cleared and holding. Rising support is at $31.25-$31.
AT&T (T, $28.51, down $0.03)
T February 31 calls (T210219C00031000, $0.10, down $0.05)
Entry Price: $0.40 (1/6/2021)
Exit Target: $0.80
Stop Target: None
Action: Upper support at $28.50-$28.25 and the 200-day moving average were breached but levels that held. Resistance remains at $28.75-$29 and the 50-day moving average.
Boston Scientific (BSX, $37.45, up $0.81)
BSX February 31 puts (BSX210219P00031000, $0.10, down $0.05)
Entry Price: $0.85 (12/14/2020)
Exit Target: $1.70
Stop Target: None
Action: Close the trade today to save the remaining premium.