MomentumOptions.com Pre-Market Update for 6/30/2021

Tight Trading Ranges Keeps Bullish Thesis Intact

8:00am (EST)

The stock market showed modest gains on Tuesday following better-than-expected economic news. Specifically, consumer confidence rose to 127.3 in June, much stronger than forecasts for a print of 119. This represented the highest reading since February 2020. Meanwhile, volatility edged higher for the second-straight day despite testing a fresh 52-week low while the small-caps showed continued weakness.

The Nasdaq settled at 14,528 (0.2%) after trading to another record high of 14,535. New and lower resistance at 14,550-14,700 was challenged but held. A close above the latter would suggest momentum towards 14,850-15,000.

The S&P 500 tagged an intraday all-time peak of 4,300 before finishing at 4,291 (+0.03%). Unchartered territory and resistance at 4,300 was kissed but held. Continued closes above this level would indicate additional upside towards 4,325-4,350.

The Dow ended at 34,292 (+0.03%) with the opening high hitting 34,469. Key resistance at 34,500 was approached but held. A close above this level would signal ongoing strength towards 34,750-35,000 with the lifetime high at 35,091.

The Russell 2000 closed at 2,308 (-0.6%) with the afternoon low tapping 2,305. Key support at 2,300 was challenged but held. A close below this level would get 2,275-2,250 and the 50-day moving average back in play. Below is a chart of the IWM.

Market Movers

Shares of Cerevel Therapeutics Holdings (CERE) skyrocketed 136% after the company announced positive results for an experimental new schizophrenia drug.

Volatility Index

The Volatility Index (VIX) rose for the second-straight session with the intraday peak reaching of 16.31. Current and lower resistance 16-16.50 was breached and held. A move above the latter would likely signal a retest towards 18-18.50 and the 50-day moving average.

Support is 14.50-14 with yesterday’s 52-week low reaching 14.10.

Market Analysis

The iShares Russell Growth 1000 ETF (NYSE: IWF) extended its winning streak to four-straight sessions after trading to an all-time peak of $272.36. Unchartered territory and lower resistance at $272-$272.50 was cleared and held. A move above the latter would indicate further momentum towards $274-$274.50.

Rising support is at $271-$270.50 followed by $269-$268.50.

RSI is in an uptrend with key resistance at 70 getting cleared and holding. Continued closes above this level would suggest strength towards 75-80 and levels from August 2020. Support is at 65-60.

Sector

The iShares MSCI Emerging Markets ETF (NYSE: EEM) had its four-session winning streak following the pullback to $55.04. Fresh and upper support at $55.50-$55 was tripped but held by a penny. A close below the latter would would signal a further fade towards $54.50-$54 and the 50-day moving average.

Resistance is at $56-$56.50.

RSI has flatlined with upper support at 55-50 holding. A close below the latter would signal weakness towards 45-40. Resistance is at 60-65.

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, $13.33, down $0.06)

MRO August 15 calls (MRO210820C00015000, $0.50, down $0.05)

Entry Price: $0.70 (6/25/2021)
Exit Target: $1.40
Return: -29%
Stop Target: None

Action: Shares traded to a late day low of $13.30 with near-term and upper support at $13.25-$13 getting challenged but holding. Resistance is at $13.50-$13.75.

AT&T (T, $28.66, down $0.12)

T July 28 puts (T210716P00028000, $0.30, unchanged)

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

Action: Yesterday’s low reached $28.65 with upper support at $28.75-$28.50 and the 200-day moving average failing to hold. Resistance remains at $29-$29.25.

Ford Motor (F, $15.01, up $0.05)

F August 18 calls (F210820C00018000, $0.27, unchanged)

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

Action: Shares rebounded to test a high of $15.20 with lower resistance at $15.25-$15.50 getting approached but holding. Support is at $15-$14.75.

Tencent Music Entertainment Group (TME, $15.86, up $0.06)

TME July 17 calls (TME210716C00017000, $0.25, down $0.02)

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

Action: Shares were up for the seventh-straight session with the high hitting $15.92. Lower resistance at $16-$16.25 was challenged but held. Support remains at $15.75-$15.50.