MomentumOptions.com Pre-Market Update for 3/29/2021

Dow, S&P 500 Post Weekly Gains

8:00am (EST)

The stock market rallied in the final hour of trading as better-than-expected news carried bullish sentiment throughout the session. Specifically, consumer sentiment improved to 84.9 in the final March reading, versus 83 in the preliminary report.

The gains lifted the Dow and S&P 500 to weekly wins while the Nasdaq and Russell 2000 posted losses despite the afternoon rally. Meanwhile, volatility tested a fresh 52-week low while closing below a key level of support for the second-straight session.

The Russell 2000 settled at 2,221 and back above its 50-day moving average while tapping a late day peak of 2,222 (+1.8%). Prior and lower resistance at 2,200-2,225 was breached and held. A move above the latter would suggest additional momentum towards 2,250-2,275. Below is a chart of the IWM.

The S&P 500 closed at 3,974 (+1.7%) after reaching a high of 3,978 ahead of the final bell. Current and lower resistance at 3,950-3,975 was recovered. A pop above the latter and the lifetime high at 3,983 would indicate strength towards 4,000-4,025.

The Dow traded to an afternoon high of 33,098 while finishing at 33,072 (+1.4%). Current and lower resistance at 33,000-33,250 was cleared and held. A move above the latter and the all-time high of 33,227 would signal ongoing strength towards 33,500-33,750.

The Nasdaq ended at 13,138 (+1.2%) with the intraday peak hitting 13,149. Prior and lower resistance at 13,000-13,150 was cleared and held. A close above the latter would likely lead to ongoing strength towards 13,250-13,400 and the 50-day moving average.

Market Movers

Shares of Discovery (DISCA) sank 27% with the weakness being attributed to a block trade offering and an analyst downgrade.

Volatility Index

The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) fell for the second-straight session with the intraday and fresh 52-week low tagging 18.68. A move below the latter would signal weakness towards 17.50-17 and levels from February 2020

Lowered resistance is at 19.50-20 followed by 21-21.50.

Market Analysis

The SPDR S&P 500 ETF (NYSE: SPY) was up for the second-straight session after trading to a high of $396.41. Prior and lower resistance at $396-$396.50 was cleared but held. A close above the latter would indicate additional upside towards $398-$398.50 with the all-time peak from earlier this month at $398.12.

Current support at $393.50-$392 followed by $390.50-$390.

RSI (relative strength index) is in an uptrend with lower resistance at 60-65 holding. A close above the latter would suggest a test towards 70 and a level that has held since early December. Support is at 55-50.

Sector

The Real Estate Select Sector SPDR Fund (NYSE: XLRE) extended its winning streak to two-straight sessions with the late day and fresh 52-week peak hitting $39.93. Prior and lower resistance from February 2020 at $39.75-$40 was cleared and held. A close above the latter would suggest additional strength towards $40.75-$41 and lifetime highs.

New support is at $39.25-$39.

RSI remains in a uptrend with key resistance at 70 getting breached and holding. Continued closes above this level would indicate upside towards 75-80 and overbought levels from February 2020. Support is at 65-60.

I could have new trades today, if I take action I will send out a Trade Alert.

Momentum Options Play List

Closed Momentum Options Trades for 2021: 14-3 (82%). 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.

International Game Tech (IGT, $17.42, up $0.42)

IGT April 20 calls (IGT210416C00020000, $0.25, up $0.05)

Entry Price: $0.95 (3/17/2021)
Exit Target: $1.90
Return: -74%
Stop Target: None

Action: Shares traded to a high of $17.59 with lower resistance at $17.50-$17.75 getting cleared but holding. Support is at $17.25-$17.

Ford Motor Company (F, $12.30, down $0.02)

F April 14 calls (F210416C00014000, $0.10, down $0.02)

Entry Price: $0.45 (3/8/2021)
Exit Target: $0.90
Return: -78%
Stop Target: None

Action: Friday’s peak reached $12.49 before the slightly lower close. Lower resistance at $12.40-$12.50 was cleared but held. Support is at $12.10-$12 followed by $11.80-$11.70 and the 50-day moving average.