MomentumOptions.com Pre-Market Update for 4/9/2021
Record Highs Back in Focus
The stock market regained momentum on Thursday with all of the major indexes closing higher and the broader market flirting with recent records. Much of the rally was attributed to Fed Chairman Powell after he said once again that the central bank has the tools to handle any temporary inflation pressures.
The Nasdaq traded to a late day high of 13,830 before settling at 13,829 (+1%). Prior and lower resistance from early February at 13,750-13,900 was recovered. A close above the latter would signal a retest towards 14,000-14,150 with the all-time peak at 14,175.
The Russell 2000 tapped a high of 2,243 while ending at 2,242 (+0.9%). Current and lower resistance at 2,225-2,250 and the 50-day moving average were cleared and held. A move above the latter would indicate additional upside towards 2,275-2,300. Below is a chart of the IWM.
The S&P 500 finished at 4,097 (+0.4%) with the all-time peak hitting 4,098 ahead of the closing bell. Key resistance at 4,100 was once again challenged but held for the fourth-straight session. A pop above this level would suggest ongoing strength towards 4,125-4,150.
The Dow closed at 33,503 (+0.2%) with the afternoon high tagging 33,506. Near-term and lower resistance at 33,500-33,750 was recovered. A move above the latter and the all-time high of 33,617 would signal a breakout towards the 34,000 area.
Par Technology (PAR) zoomed 25% after announcing it has acquired Punchh for roughly $500 million in cash and stock. Punchh provides apps for restaurants that engage people in games and rewards systems that are all hooked into point of sale (POS) systems.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) tested a second-straight 52-week low of 16.55 with upper support at 17-16.50 getting breached and holding. A drop below the latter would indicate additional weakness towards 15.50-15.
Lowered resistance is at 17.50-18 followed by 19-19.50.
The iShares Russell Growth 1000 ETF (NYSE: IWF) extended its winning streak to six-straight sessions with the second half high tapping $254.71. Prior and lower resistance from mid-February at $254.50-$255 was recovered. A move above the latter and the all-time peak of $255.61 would suggest a breakout towards $257-$257.50.
Fresh support is at $253.50-$253 followed by $251.50-$251.
RSI remains in an uptrend with lower resistance at 65-70 getting cleared and holding. A close above the latter would suggest additional strength towards 75-80 and overbought levels from late August/ early September. Support is at 60.
The iShares PHLX Semiconductor ETF (Nasdaq: SOXX) rebounded following the intraday trip to $448.71. Current and lower resistance at $448.50-$449 was breached but held. A close above the latter and Monday’s all-time top at $449.76 would signal a breakout towards the $452-$452.50 area.
Current support $444.50-$444.
RSI is back in a slight uptrend with key resistance at 65 holding. Continued closes above this level would signal additional strength towards 70-75 and levels from January. Support is at 60-55.
The major indexes showed strength last Thursday and on Monday to signal money was moving back into the market. Another positive close today would be a bullish signal to start next week with first quarter earnings coming into focus. Financials will be the center of attention with JPMorgan (JPM) and Wells Fargo (WFC) reporting Wednesday morning.
Momentum Options Play List
Closed Momentum Options Trades for 2021: 15-4 (79%). 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.
Western Union (WU, $25.05, down $0.22)
WU May 26 calls (WU210521C00026000, $0.60, down $0.05)
Entry Price: $0.60 (4/7/2021)
Exit Target: $1.20
Stop Target: None
Action: Shares tested an intraday low of $24.95 with current and upper support at $25-$24.75 getting tripped but holding. Resistance remains at $25.50-$25.75 with the early March 52-week high at $25.73.
iShares MSCI Emerging Markets ETF (EEM, $54.01, up $0.44)
EEM May 55 calls (EEM210521C00055000, $0.85, up $0.20)
Entry Price: $1.00 (4/5/2021)
Exit Target: $2.00
Stop Target: None
Action: Thursday’s peak reached $54.28 with lower resistance at $54-$54.50 getting recovered. I would like to see a close above double-nickels and the 50-day moving average today. Support is at $53.50-$53.