MomentumOptions.com Pre-Market Update for 3/12/2021

Bulls Push Another Round of Record Highs

8:00am (EST)

The stock market kept its current momentum with three of the four major averages setting fresh all-time highs. The bullish sentiment came on the heels of President signing into law a $1.9 trillion coronavirus relief package, which includes provisions of $1,400 stimulus checks to most Americans. Also, relative stability in bond rates, a continued ramp-up in vaccinations and increasing optimism in the exonomic growth outlook is also helping fuel the current rally.

The Nasdaq tapped a midday high of 13,433 while ending at 13,398 (+2.5%). Prior and lower resistance from the start of the month at 13,350-13,500 and the 50-day moving average were cleared and held. A close above the latter would indicate ongoing strength towards 13,600-13,750.

The Russell 2000 settling on the session peak and record high at 2,338 (+2.3%). Unchartered territory and lower resistance at 2,325-2,350 was breached and held. A move above the latter would signal additional momentum towards 2,375-2,400. Below is a chart of the IWM.

The S&P 500 closed at 3,939 (+1%) after tapping an intraday record high of 3,960. Fresh and lower resistance at 3,950-3,975 was cleared but held. A pop above the latter would indicate strength towards 3,975-4,000.

The Dow tested a lifetime high of 32,661 before finishing at 32,485 (+0.6%). New and lower resistance at 32,500-32,750 was breached but held. A close above the latter would indicate additional momentum towards 33,000-33,250.

Market Movers

Blink Charging (BLNK) rallied 17% after the company was awarded a grant from the Ohio Environmental Protection Agency.

Volatility Index

The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) extended its losing streak to three-straight sessions with the intraday low hitting 21.45. Prior and upper support at 21.50-21 was breached but held. A move below the latter would signal ongoing weakness towards 20.50-20.

Lowered resistance is at 22.50-23 followed by 23.50-24 and the 50-day moving average.

Market Analysis

The Invesco QQQ Trust (Nasdaq: QQQ) rebounded to test a high of $319.86. Lower resistance at $319.50-$320 was tripped but held. A close above the latter and the 50-day moving average would suggest further upside towards $322-$322.50.

Current support is at $317.50-$317 followed by $315-$314.50.

RSI (relative strength indicator) is in an uptrend after clearing and holding key resistance at 50. Continued closes above this level would indicate additional strength towards 55-60. Support is at 45-40.

Sector

The Health Care Select Sector SPDR Fund (NYSE: XLV) extended its winning streak to three-straight sessions with the afternoon peak reaching $114.98. Near-term and lower resistance at $114.50-$115 was breached but held. A close above the latter and the 50-day moving average would signal continued strength towards $116-$116.50.

Rising support is at $114-$113.50 with backup help at $112.50-$112.

RSI remains in an uptrend with lower resistance at 50-55 getting recovered. A close above the latter would indicate additional upside towards 60-65. Support is at 45-40.

Market Outlook

Once again, volatility will be a key indicator to see if the current rally can hold into today’s close and for next week. The VIX last closed below the 20 level on February 19th before soaring back above the 30 level to close out the month. It was the first official close below 20 in over a year but failed to hold into the next session. This would be a very bullish signal for the market over the near-term if the bulls can make this happen for consecutive sessions.

We got some great pin action with our current positions yesterday so let’s go check the tape.

Momentum Options Play List

Closed Momentum Options Trades for 2021: 11-2 (85%). 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.

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International Game Tech (IGT, $19.29, up $1.14)

IGT April 20 calls (IGT210416C00020000, $1.25, up $0.50)

Entry Price: $1.10 (3/11/2021)
Exit Target: $2.20
Return: 14%
Stop Target: None

Action: Shares tapped a late day 52-week peak of $19.57 with fresh and lower resistance at $19.50-$19.75 getting cleared but holding. Rising support is at $19-$18.75.

The stock is on the verge of a triple-top breakout with upside potential towards the $22-$24 area if $20 is cleared and held. If shares can trade above $22-$22.50 by mid-April, these options will easily double from current levels.

These call options traded over 1,200 yesterday and there was heavy volume in the IGT April 21 calls with over 5,000 exchanging hands. This is signaling traders are expecting continued upside in the stock.

iShares MSCI Emerging Markets ETF (EEM, $54.97, up $1.68)

EEM April 55 calls (EEM210416C00055000, $1.45, up $0.65)

Entry Price: $0.90 (3/9/2021)
Exit Target: $1.90
Return: 61%
Stop Target: $1.10 (Stop Limit)

Action: Set an initial Stop Limit at $1.10 to start protecting profits and to avoid a loss.

Thursday’s late day high reached $55.04 with near-term and lower resistance at $55-$55.50 getting cleared and holding. Continued closes above the 50-day moving average would indicate additional strength towards $56.50-$57. New support is at $54-$53.50.

Ford Motor Company (F, $12.81, down $0.10)

F April 14 calls (F210416C00014000, $0.37, down $0.07)

Entry Price: $0.45 (3/8/2021)
Exit Target: $0.90
Return: -18%
Stop Target: None

Action: Shares tapped another fresh 52-week peak of $13.06 before pullback back afterwards. Lower resistance at $13-$131.10 was cleared but held. Near-term support remains a $12.80-$12.70.