MomentumOptions.com Pre-Market Update for 3/22/2021
Mixed Session Gives Bears Weekly Win
The stock market was mixed on Friday as mild declines in Treasury yields supported Tech while the broader market pulled back. The weakness in the blue-chips were enough to give the bears their first overall win in three weeks with volatility remaining above a key level of support.
The Russell 2000 showed the most strength after testing a midday high of 2,298 while ending at 2,287 (+0.9%). Current and lower resistance at 2,275-2,300 was recovered. A move above the latter would indicate a retest towards 2,300-2,325. Below is a chart of the IWM.
The Nasdaq tested an intraday peak of 13,252 before settling at 13,215 (+0.8%). Near-term and lower resistance at 13,250-13,400 was breached but held. A close above the latter and the 50-day moving average would suggest additional strength towards 13,500-13,650.
The Dow finished at 32,627 (-0.7%) after tagging a morning low of 32,505. Fresh and upper support at 32,750-32,500 was breached and failed to hold. A drop below the latter would signal a further pullback towards 32,250-32,000.
The S&P 500 closed at 3,913 (-0.1%) with the opening low tapping 3,886. New and upper support from the start of the month at 3,900-3,875 was tripped but held. A close below the latter and the 50-day moving average would suggest additional weakness towards 3,850-3,825.
Shares of Visa (V) slumped 6.2% following a report the the Justice Department’s antitrust division is investigating whether the company is engaging in anticompetitive practices in the debit-card market.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) fell for the eight time in nine sessions despite testing an intraday high of 23.17. Prior and lower resistance at 23-23.50 was breached but held. A close above the latter and the 50-day moving average would indicate a retest towards 25.50-26 and the 200-day moving average.
Upper support at 20-19.50 was also breached but held on the fade to 19.90 afterwards.
The Wilshire 5000 Composite Index (NYSE: WLSH) rebounded with the intraday high hitting 41,601. New and lower resistance at 41,500-41,750 was cleared but held. A move above the latter would indicate a retest towards 42,000-42,250.
Support at 41,250-41,000 and the 50-day moving average.
RSI (relative strength index) has leveled out with key support at 50 holding. A close below this level would signal weakness towards 45-40 and lows from earlier this month. Resistance is at 55-60.
The Utilities Select Spider Fund (NYSE: XLU) snapped a two-session slide after trading to an intraday high of $62.74. Near-term and lower resistance at $62.50-$63 was cleared but held. A move above the latter would indicate a retest towards $63-$63.50.
Support is at $62-$61.50 and the 50-day moving average.
RSI is back in a slight uptrend with lower resistance at 55-60 holding. A close above the latter would suggest additional strength towards 65 and the monthly high. Key support is at 50.
Friday’s mixed session still produced lower lows for the major indexes and higher highs on the VIX. However, the 50-day moving averages remain in solid uptrends for the market and is curling lower on the VIX. Earnings season will begin in roughly three weeks so the current choppiness could continued into month end. A slight warning signal for lower market lows would be if the VIX closes above the 50-day moving average this week.
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International Game Tech (IGT, $18.55, up $0.29)
IGT April 20 calls (IGT210416C00020000, $0.80, up $0.05)
Entry Price: $0.95 (3/17/2021)
Exit Target: $1.90
Stop Target: None
Action: Shares tested a high of $18.82 with lower resistance at $18.75-$19 getting breached but holding. Support is at $18.25-$18 and the 50-day moving average.
Altria Group (MO, $50.55, down $0.02)
MO April 47.50 puts (MO210416P00047500, $0.50, down $0.05)
Entry Price: $0.75 (3/16/2021)
Exit Target: $1.50
Stop Target: None
Action: Friday’s high reached $51.17 with 2-year and lower resistance at $51-$51.50 getting cleared but holding. Support is at $50-$49.50.
RSI is still signaling overbought levels but I’d like to see a close below $50 to start the week.
Ford Motor Company (F, $12.83, up $0.34)
F April 14 calls (F210416C00014000, $0.33, up $0.03)
Entry Price: $0.45 (3/8/2021)
Exit Target: $0.90
Stop Target: None
Action: Lower resistance is at $12.90-$13 was cleared but held on the run to $12.95. Support is at $12.60-$12.50.