MomentumOptions.com Pre-Market Update for 2/19/2021
Bears Stay Aggressive/ Profit Alert (EEM)
The stock market traded lower throughout Thursday’s session as disappointing economic news concerning jobs and the housing sector weighed on sentiment. Additionally, the uptick in Treasury yields caused inflation worries after the benchmark 10-year yield traded to one-year highs and rising above the 1.30% level.
The Dow had its three-session winning streak snapped after tapping a morning low of 31,285 while ending at 31,493 (-0.4%). Near-term and upper support at 31,500-31,250 was breached and failed to hold. A move below the latter would indicate a further pullback towards 31,000-30,750 and the 50-day moving average.
The S&P 500 settled at 3,913 (-0.4%) while testing an opening low of 3,885. Near-term and upper support at 3,900-3,875 was tripped but held. A close below the latter would signal a retest towards 3,850-3,825.
The Nasdaq traded to an intraday low of 13,714 before finishing at 13,865 (-0.7%). Current and upper support at 13,800-13,700 was breached but held. A drop below the latter would suggest additional weakness towards 13,600-13,500.
The Russell 2000 closed at 2,218 (-1.7%) while bottoming at 2,208. Fresh and upper support at 2,225-2,200 failed to hold. A close below the latter would indicate ongoing weakness towards 2,175-2,150.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) extended its winning streak to three-straight sessions with the morning peak hitting 24.23. Near-term and lower resistance at 24-24.50 was breached but held. A close above the latter and the 50-day moving average would suggest upside towards 25.50-26.
Rising support is at 22-21.50 followed by 20.50-20.
The Invesco QQQ Trust (Nasdaq: QQQ) extended its losing streak to 3-straight sessions after testing a morning low of $328.36. Fresh and upper support at $328.50-$328 was breached but held. A close below the latter would suggest a further pullback towards $327-$326.50.
Resistance is at $333-$333.50 followed by $334.50-$335.
RSI (relative strength indicator) remains in a downtrend with upper support at 55-50 holding. A close below the latter would indicate additional weakness towards 45-40 and levels from late October. Resistance is at 60.
The Spider S&P Retail ETF (NYSE: XRT) fell for the third-straight session following the intraday pullback to $77.22. Prior and upper support from earlier this month at $77.50-$77 was breached but held. A close below the latter would suggest a retest towards $76-$75.50.
Resistance is at $78.50-$79.
RSI is in a downtrend with key support at 50 holding. A close below this level would suggest weakness towards 45-40 and levels from early November. Resistance is at 55-60.
I have another Profit Alert today on EEM’s pullback. I could also have a New Trade today as I’ve been doing research on Aflac (AFL) and like the current setup. I don’t usually like opening trades on Friday’s but yesterday’s action was bullish.
Momentum Options Play List
Closed Momentum Options Trades for 2021: 5-1 (83%). 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, $32.17, up $0.42)
FOXA March 34 calls (FOXA210319C00034000, $0.80, up $0.10)
Entry Price: $1.05 (2/12/2021)
Exit Target: $2.10
Stop Target: None
Action: Thursday’s peak reached $32.41 with lower resistance at $32.25-$32.50 getting cleared but holding. Support is at $31.75-$31.50.
Pfizer (PFE, $34.56, down $0.33)
PFE March 36 calls (PFE210319C00036000, $0.40, down $0.10)
Entry Price: $0.55 (2/10/2021)
Exit Target: $1.10
Stop Target: None
Action: Yesterday’s low tagged $34.52 with upper support at $34.75-$34.50 failing to hold. Resistance is at $34.75-$35 and the 200-day moving average.
iShares MSCI Emerging Markets ETF (EEM, $57.16, down $0.80)
EEM March 58 calls (EEM210319C00058000, $1.00, down $0.30)
Entry Price: $0.65 (2/5/2021)
Exit Target: $1.85 (closed half at $1.40 on 2/11/2021)
Stop Target: $1.20 (Stop Limit)
Action: The Stop on the other half of the position tripped on the fade to $56.54 yesterday. I will keep EEM on the Watch List for a possible reentry point.