MomentumOptions.com Pre-Market Update for 2/17/2021
Blue-Chips Stay Strong on Overall Pullback
The stock market set another round of record highs on Tuesday’s open before closing mostly lower aside from the blue-chips. Rising bond yields kept bullish sentiment in check as some of the choppiness came over concerns about rising interest rates. Specifically, the 10-year Treasury yield tagged 1.3% late in the session for the first time since last March igniting concerns for the potential for a jump in inflation that could pose a threat to certain sectors.
The Dow settled at 31,522 (+0.2%) after trading to a record peak of 31,608. Current and lower resistance at 31,500-31,750 was breached but held. A close above the latter would indicate additional momentum towards the 32,000 level.
The S&P 500 tested an opening all-time high of 3,950 before ending at 3,932 (-0.1%). Key resistance at 3,950 was kissed but held. A close above this level would indicate additional upside towards 3,975-4,000.
The Nasdaq tagged a morning and lifetime high of 14,175 while finishing at 14,047 (-0.3%). Fresh and lower resistance at 14,150-14,300 was cleared but held with a close above the latter signaling ongoing strength towards 14,350-14,500.
The Russell 2000 reached a first half peak of 2,310 before closing at 2,272 (-0.7%). Near-term and lower resistance at 2,300-2,325 was tripped but held. A move above the latter and the record high at 2,318 would suggest a fresh breakout towards 2,335-2,360.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the first time in three sessions with the intraday peak reaching 22.46. Current and lower resistance at 22-22.50 was breached but held. A close above the latter would indicate a retest towards 23-23.50 and the 50-day moving average.
Support remains at 20.50-20.
The iShares Russell Growth 1000 ETF (NYSE: IWF) had its two-session winning streak snapped despite tagging a fresh all-time high of $255.61. Unchartered territory and lower resistance at $255.50-$256 was cleared but held. A close above the latter would indicate momentum towards $257-$257.50.
Support is at $253-$252.50 followed by $251.50-$250.
RSI is showing signs of rolling over with key support at 60 holding. A close below this level would suggest additional weakness towards 55-50. Resistance is at 65-70.
The SPDR S&P Homebuilders ETF (NYSE: XHB) was down for the second-straight session following the intraday tumble to $63.41. Fresh and upper support at $63.50-$63 was breached but held. A close below the latter would signal additional weakness towards the $62-$61.50 area.
Resistance is at $64.50-$65 with last Thursday’s all-time peak at $65.49.
RSI is in a downtrend with upper support at 55-50 holding. A close below the latter would be a bearish development with additional risk towards 45 and the January and November low at 45. Resistance is at 60-65.
I have updated our current positions so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2021: 4-1 (80%). 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.
Fox Corporation (FOXA, $31.73, down $0.86)
FOXA March 34 calls (FOXA210319C00034000, $0.70, down $0.35)
Entry Price: $1.05 (2/12/2021)
Exit Target: $2.10
Stop Target: None
Action: Shares tested a low of $31.57 with upper support at $31.75-$31.50 failing to hold. Resistance is at $32-$32.25.
Pfizer (PFE, $34.69, down $0.03)
PFE March 36 calls (PFE210319C00036000, $0.50, down $0.05)
Entry Price: $0.55 (2/10/2021)
Exit Target: $1.10
Stop Target: None
Action: Tuesday’s low tapped $34.56 with upper support at $34.50-$34.25 getting challenged but holding. Resistance is at $34.75-$35 and the 200-day moving average
iShares MSCI Emerging Markets ETF (EEM, $57.94, up $0.14)
EEM March 58 calls (EEM210319C00058000, $1.35, up $0.05)
Entry Price: $0.65 (2/5/2021)
Exit Target: $1.85 (closed half at $1.40 on 2/11/2021)
Stop Target: $1.00, raise to $1.20 (Stop Limit)
Action: Raise the Stop Limit from $1 to $1.20 to ensure a triple-digit return.
Shares were up for the 11th-straight session with Monday’s all-time peak reaching $58.29. Unchartered territory and lower resistance at $58.25-$58.50 was breached but held. Rising support is at $57.75-$57.50.