MomentumOptions.com Pre-Market Update for 2/9/2021
Bulls Keep Momentum Although Volatility Rises
The stock market continued its run towards record highs on Monday with the blue-chips finally joining the party as expectations of a $1.9 trillion stimulus package remains in focus. Encouraging progress on declining coronavirus cases and ongoing vaccine rollouts also added to the bullish sentiment, fueling hope that the U.S. and global recovery will accelerate in the second half of this year.
The Russell 2000 closed on its record high of 2,289 (+2.5%). Unchartered territory and lower resistance at 2,280-2,300 was cleared and held. A move above the latter would indicate additional upside towards 2,320-2,340.
The Nasdaq finished on an all-time peak of 13,987 (+1%). New resistance at 14,000 was challenged but held. A close above this level would suggest a continued breakout towards 14,100-14,250.
The Dow settled at 31,385 (+0.8%) after reaching a lifetime high of 31,386 ahead of the closing bell. Current and lower resistance at 31,250-31,500 was cleared and held. A close above the latter would signal upside towards 31,750-32,000.
The S&P 500 ended on a new all-time of 3,915 (+0.7%). Key resistance at 3,900 was breached and held. A close above 3,925 would indicate additional momentum towards 3,950-3,975.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the first time in six sessions with the high tapping 22.07. Lower resistance at 22-22.50 was breached but held. A close above the latter would signal a retest towards 23-23.50 and the 50-day moving average.
Support is at 21-20.50 with a more important hurdle at the 20 level.
The Invesco QQQ Trust (Nasdaq: QQQ) extended its winning streak to 3-straight sessions after testing a fresh all-time high of $333.74. Unchartered territory and lower resistance at $333.50-$334 was cleared and held. A close above the latter would suggest ongoing momentum towards $335.50-$336.
Rising support is at $332-$331.50 followed by $330-$329.50.
RSI (relative strength indicator) remains in a slight uptrend with key resistance at 65 getting recovered. Continued closes above 65 would signal additional strength towards 70 and a level that has been holding since early December. Support is at 60-55.
The SPDR Gold Shares (NYSE: GLD) was up for the second-straight session after surging to an morning peak of $172.40. New and lower resistance at $172-$172.50 was breached but held. A close above the latter would signal a run towards $173.50-$174 and the 200/50-day moving averages.
Support is at $171.50-$171 followed by $170-$169.50.
RSI is in an uptrend with lower resistance at 45-50 getting cleared and holding. A close above the latter would suggest additional strength towards 55-60. Support is at 40-35.
I have updated our current trades so let’s go check the tape.
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.
iShares MSCI Emerging Markets ETF (EEM, $56.34, up $0.10)
EEM March 58 calls (EEM210319C00058000, $0.75, unchanged)
Entry Price: $0.65 (2/5/2021)
Exit Target: $1.30
Stop Target: None
Action: Monday’s peak reached $56.44 with current and key resistance at $56.50 getting challenged but holding. A close above this level and the current 52-week peak at $56.54 would signal a possible breakout towards $57-$57.50. Support is at $56.25-$56.
Bank of America (BAC, $33.09, up $0.72)
BAC March 32 calls (BAC210319C00032000, $1.90, up $0.40)
Entry Price: $0.65 (2/2/2021)
Exit Target: $2.05, raise to $2.50 (closed half at $1.95 on 2/8/2021)
Stop Target: $1.30, raise to $1.70 (Stop Limit)
Action: Raise the Exit Target from $2.05 to $2.50 on the other half of the position. Raise the Stop Limit from $1.30 to $1.70.
Monday’s high tapped $33.28 with prior and lower resistance from mid-January at $33.25-$33.50 getting cleared but holding. Support is at $33-$32.75.
AT&T (T, $28.77, down $0.16)
T February 31 calls (T210219C00031000, $0.10, unchanged)
Entry Price: $0.40 (1/6/2021)
Exit Target: $0.80
Stop Target: None
Action: Upper support at $28.75-$28.50 and the 200-day moving average held was breached but held on the fade to $28.62. Resistance at $29-$29.25 and the 50-day moving average.