MomentumOptions.com Pre-Market Update for 6/23/2021

Nasdaq Hits All-Time High

8:00am (EST)

The stock market closed mostly higher on Tuesday following comments from Fed Chair Jerome Powell who testified in a congressional hearing. Powell reiterated high inflation was expected to prove temporary and the Fed will do everything it can to support the economy for as long as it takes to complete the recovery.

The Nasdaq traded to an all-time high of 14,269 before settling at 14,253 (+0.8%). Key resistance at 14,200 was cleared and held. Continued closes above this level keeps upside towards 14,350-14,500 in focus.

The S&P 500 closed at 4,246 (+0.5%) after testing an intraday high of 4,255. Key resistance at 4,225-4,250 was cleared but held. A close above this level and the recent record high at 4,257 indicate a run towards 4,275-4,300.

The Russell 2000 tagged an afternoon high of 2,298 while ending at 2,295 (+0.4%). Key resistance at 2,300 was challenged but held. A close above this level would suggest further strength towards 2,325-2,350 with the mid-March record peak at 2,360. Below is a chart of the IWM.

The Dow tapped a late day high of 34,040 before ending at 33,945 (+0.2%). Key resistance at 34,000 was breached but held. Continued closes above this level and the 50-day moving average would signal a retest towards 34,250-34,500.

Market Movers

Shares of Alfi (ALF) skyrocketed 1085 after announcing deals with Uber (UBER) and Lyft (LYFT). The company will rollout its Alfi tablets in Miami, the first of 10 major cities, to help provide them with an additional revenue opportunities.

Alfi is a recent initial public offering that went public in early May at $4.15 a share. The company offers an AI enterprise platform that powers computer vision with machine learning models.

Volatility Index

The Volatility Index (VIX) kissed a first half low of 15.76 with prior and upper support 16-15.50 getting tripped but holding. A close below the 15 level and the 52-week low at 15.04 would be a bullish development for the overall market.

Lowered resistance is at 18-18.50 and the 50-day moving average.

Market Analysis

The S&P 400 Mid Cap Index (NYSE: MID) traded in a 29-point range with the session high reaching 2,681. Current and lower resistance at 2,675-2,700 was cleared but held. A close above the latter would suggest a retest towards 2,725-2,750 and the 50-day moving average.

Support is at 2,650-2,625. A close below the 2,600 level would be a renewed bearish development.

RSI (relative strength index) has flatlined with lower resistance at 45-50 holding. A close above the latter would signal strength towards 55-60. Support is at 40-35.

Sector

The Utilities Select Spider Fund (NYSE: XLU) was slightly weak after tagging an intraday high of $64.62. Current and lower resistance at $64.50-$65 was cleared but failed to hold. A move above the latter would indicate additional upside towards $65.25-$65.75 and the the 50-day moving average.

Support is at $64-$63.50.

RSI is showing signs of rolling over with key support at 40 holding. A close below this level would suggest additional weakness towards 35-30 and levels from late February. Resistance is at 45-50.

Market Outlook

The market could trade in a tighter range today as Wall Street awaits major economic news and the revised GDP (gross domestic product) report due out on Thursday. Estimates have growth pegged at 6.4% for the first quarter, or no change.

Outside of the reopening third quarter surge last year, it was the best period for GDP since the third quarter of 2003. If this number is revised significantly higher or lower, it could have a major impact on the market. As for today, two more Fed officials are expected to speak, one before the open and one after the close.

Momentum Options Play List

Closed Momentum Options Trades for 2021: 18-9 (67%). 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.

AT&T (T, $28.78, down $0.15)

T July 28 puts (T210716P00028000, $0.33, up $0.03)

Entry Price: $0.55 (6/18/2021)
Exit Target: $1.10
Return: -38%
Stop Target: None

Action: Shares traded down to $28.77 ahead of the closing bell with upper support at $28.75-$28.50 and the 200-day moving average holding. Resistance at $29-$29.25.

Ford Motor (F, $14.91, up $0.13)

F August 18 calls (F210820C00018000, $0.25, unchanged)

Entry Price: $0.55 (6/9/2021)
Exit Target: $1.10
Return: -55%
Stop Target: None

Action: Tuesday’s peak hit $15.11 with lower resistance at $15-$15.25 getting tripped but holding. Support is at $14.75-$14.50.

Tencent Music Entertainment Group (TME, $15.21, up $0.10)

TME July 17 calls (TME210716C00017000, $0.25, unchanged)

Entry Price: $0.60 (6/9/2021)
Exit Target: $1.20
Return: -58%
Stop Target: None

Action: Shares tested a high of $15.25 with lower resistance at $15-$15.25 getting recovered. Support is at $14.75-$14.50.