MomentumOptions.com Pre-Market Update for 6/29/2021

Nasdaq, S&P 500 Set Fresh Record Highs

8:00am (EST)

The stock market was mixed on Monday, with the broader market and Tech showing continued strength while the blue-chips and small-caps lagged. Economic news was light but gets busier later in the week while Energy and Financials led sector laggards.

The Nasdaq tested a late day all-time high of 14,505 while ending at 14,500 (+1%). Unchartered territory and fresh resistance at 14,500 was cleared and held. Continued closes above this level would indicate momentum towards 14,650-14,800.

The S&P 500 closed at 4,290 (+0.2%) with the record peak hitting 4,292. Key resistance at 4,300 was challenged but held. Continued closes above this level would signal ongoing strength towards 4,325-4,350.

The Dow tapped a low of 34,186 while finishing at 34,283 (-0.4%). Key support at 34,250 was breached but held. A close below this level and the 50-day moving average would suggest a retest towards 34,000-33,750.

The Russell 2000 had its five-session winning streak snapped after settling at 2,322 (-0.5%) with the midday low tagging 2,307. New and upper support at 2,325-2,300 failed to hold. A close below the latter would suggest a further fade towards 2,275-2,250 and the 50-day moving average. Below is a chart of the IWM.

Market Movers

Shares of JinkoSolar Holding (JKS) surged nearly 23% after announcing its Jinko Solar subsidiary applied for an initial public offering on China’s STAR Market.

Volatility Index

The Volatility Index (VIX) was up for the first time in six sessions after hitting a high of 16.46. Near-term and lower resistance 16.50-17 was challenged but held. A close above the latter would suggest strength towards 18-18.50 and the 50-day moving average.

Support is 15-14.50 with the recent 52-week low at 14.19.

Market Analysis

The SPDR S&P 500 ETF (NYSE: SPY) was up for the third-straight session and for the fifth time in six with the intraday all-time high reaching $427.65. Fresh and lower resistance at $427.50-$428 was tripped but held. A close above the latter would indicate additional strength towards $429.50-$430.

Rising support is at $426-$425.50 followed by $424-$423.50.

RSI (relative strength index) is in an uptrend with key resistance at 60 getting recovered. Continued closes above this level would signal further strength towards 65-70 and levels from late April. Support is at 55-50.

Sector

The Industrials Select Sector SPDR Fund (NYSE: XLI) was down for the first time in three sessions after tapping a low of $101.35. Current and upper support at $101.50-$101 was breached but held. A close below the latter would suggest additional risk towards $100-$99.50.

Resistance is at $102.50-$103 and the 50-day moving average.

RSI is back in a downtrend with upper support at 45-40 holding. A drop below the latter would indicate weakness towards 35-30 and levels from earlier this month. Key resistance is at 50.

Market Outlook

The market action remains bullish and the technical outlook is still signaling higher highs for the major indexes over the near-term. The only concern is that the Nasdaq is showing slightly overbought levels with RSI just above the 70 level and is approaching the January high near 75.

I have been talking about the index making a run towards 14,500 this month and that was achieved on Monday. However, this doesn’t mean higher highs can’t be reached as there is a good possibility a run towards the 15,000 level could come at some point in July.

I could have 1-2 new trades today as I mentioned yesterday we may move into faster moving stocks while closing one or two of or our current positions. I will send out a Trade Alert if I take action so stay locked-and-loaded.

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.

Marathon Oil (MRO, $13.39, down $0.68)

MRO August 15 calls (MRO210820C00015000, $0.55, down $0.20)

Entry Price: $0.70 (6/25/2021)
Exit Target: $1.40
Return: -21%
Stop Target: None

Action: Shares failed to show continued momentum following Monday’s fade to $13.28. Current and upper support at $13.50-$13.25 failed to hold with shares remaining in a month long trading range. Resistance is at $13.75-$14.

AT&T (T, $28.78, down $0.11)

T July 28 puts (T210716P00028000, $0.30, up $0.05)

Entry Price: $0.55 (6/18/2021)
Exit Target: $1.10
Return: -45%
Stop Target: None

Action: Monday’s low kissed $28.75 with upper support at $28.75-$28.50 and the 200-day moving average holding. Resistance is at $29-$29.25.

Ford Motor (F, $14.96, down $0.23)

F August 18 calls (F210820C00018000, $0.27, down $0.04)

Entry Price: $0.55 (6/9/2021)
Exit Target: $1.10
Return: -51%
Stop Target: None

Action: Shares tagged a low of $14.83 with near-term and upper support at $15-$14.75 failing to hold. Lowered resistance is at $15.25-$15.50.

Tencent Music Entertainment Group (TME, $15.80, up $0.01)

TME July 17 calls (TME210716C00017000, $0.27, down $0.01)

Entry Price: $0.60 (6/9/2021)
Exit Target: $1.20
Return: -55%
Stop Target: None

Action: Yesterday’s high touched $16.17 with lower resistance at $16-$16.25 getting cleared but holding for the second-straight session. A close above the latter and the 50-day moving average could lead to a quick trip towards $17. Support remains at $15.75-$15.50.