MomentumOptions.com Pre-Market Update for 4/15/2021
Blue-Chips Test Fresh All-Time High
The stock market closed mixed on Wednesday despite exceptional earnings from the Financial sector. Technology stocks weighed down the broader market while the small-caps showed the most strength.
Fed speak was also back in focus although Chairman Powell provided little in the way of news for bond-market traders. The 10-year Treasury yield held its slight early gains after going out at 1.64% while volatility edged higher despite falling near the 15 level shortly after the opening bell.
The Russell 2000 tapped a morning high of 2,272 while ending at 2,247 (+0.8%) and back above its 50-day moving average Current and lower resistance at 2,250-2,275 was cleared but failed to hold. A move above the latter would indicate additional upside towards 2,300-2,325. Below is a chart of the IWM.
The Dow closed at 33,730 (+0.2%) with the intraday record high tagging 33,911. Unchartered territory and lower resistance at 33,750-34,000 was breached but held. A close above the latter would signal ongoing momentum towards 34,250-34,500.
The S&P 500 finished lower at 4,124 (-0.4%) despite trading to an all-time peak of 4,151. Key resistance at 4,150 tripped but held for the second-straight session. A close above this level would suggest ongoing strength towards 4,175-4,200.
The Nasdaq traded to an opening high of 14,033 before settling in negative territory at 13,857 (-1%). Near-term and lower resistance at 14,000-14,150 was breached but held for the second-straight day. A close above the latter and the record peak at 14,175 would indicate strength towards 14,200-14,350.
Shares of Coinbase (COIN) rallied 31% following its debut after a direct listing on the Nasdaq. The exchange determined a reference price of $250 and the stock opened at $381 per share. The shares climbed as high as $429.54 intraday, valuing the company at $112 billion, before dropping from there to close at $328.28.
The iPath S&P Vix Short-Term Futures (NYSE: VIX) was up for the second time in three sessions despite tapping a fresh 52-week low of 15.38. Longer-term and upper support at 15.50-15 was tripped but held.
The bounce to 17.69 afterwards breached but held lower resistance at 17.50-18. A close above 18.50 would suggest strength towards 19.50-20.
The Spider Small-Cap 600 ETF (NYSE: SLY) was up for the fourth time in five sessions following the intraday run to $96.22. Near-term and lower resistance at $96-$96.50 was cleared but failed to hold. A close above the latter would suggest additional strength towards $97.50-$98 with the all-time peak from mid-March at $99.71.
Support is at $95-$94.50 followed by $93.50-$93 and the 50-day moving average.
RSI (relative strength indicator) is back in a slight uptrend with key resistance at 55 holding. A move above this level would suggest additional upside towards 60-65. Support is at 50-45.
The Utilities Select Spider Fund (NYSE: XLU) extended its winning streak to three-straight sessions after closing on the session high of $65.94. Prior and lower resistance from early November at $65.50-$66 was cleared and held. A move above the latter would indicate a retest towards $67-$67.50 with the all-time peak at $67.93.
Support is at $65.50-$65.
RSI is in an uptrend with lower resistance at 70-75 getting cleared and holding. A close above the latter would suggest additional strength towards 80-85 and the monthly highs from January 2020. Support is at 65-60.
Bank of America (BAC), Citigroup (C), Delta Air Lines (DAL), PepsiCo (PEP), Taiwan Semiconductor Manufacturing (TSM) are some of the major companies announcing ahead of this morning’s open.
I’m hoping to have another new trade this week but wanted to see how earnings would start to unfold. So far, so good. In the meantime, I have updated our current trades so let’s go check the tape.
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, $25.58, up $0.18)
WU May 26 calls (WU210521C00026000, $0.70, up $0.05)
Entry Price: $0.60 (4/7/2021)
Exit Target: $1.20
Stop Target: None
Action: Shares traded to a 52-week high of $25.75 with the options hitting 77 cents. Fresh and lower resistance at $25.75-$26 was kissed but held. There is breakout potential towards $26.50-$26.75 on continued momentum. Rising support is at $25.25-$25.
iShares MSCI Emerging Markets ETF (EEM, $53.72, up $0.27)
EEM May 55 calls (EEM210521C00055000, $0.65, up $0.05)
Entry Price: $1.00 (4/5/2021)
Exit Target: $2.00
Stop Target: None
Action: Wednesday’s peak reached $54.04 with near-term and lower resistance is at $54-$54.50 getting breached but holding. Support is at $53.50-$53.