MomentumOptions.com Pre-Market Update for 7/27/2021

Bulls Show Continued Momentum

8:00am (EST)

The stock market was slightly choppy on Monday after trading in a tight range while setting another round of fresh all-time highs. The hesitancy came as Wall Street prepares for a slew of second-quarter earnings and another update from the Federal Reserve.

Excluding the small-caps, the major indexes extended their winning streak to five-straight sessions despite a slight uptick in volatility. However, the bulls held a key level of resistance to keep volatility in their favor heading into the busy week.

The Russell 2000 ended at 2,216 (+0.6%) after testing an opening high of 2,232. Lower resistance at 2,225-2,250 was cleared but held. A close above the later and the 50-day moving average would likely signal another push towards 2,275-2,300. Below is a chart of the IWM.

The S&P 500 finished at a new record and session high of 4,422 (+0.2%). Unchartered territory and lower resistance at 4,425-4,450 was challenged but held. A pop above the latter would be an ongoing bullish development for additional upside towards 4,450-4,475.

The Dow settled at 35,144 (+0.2%) after tapping a late day and all-time high of 35,150. New resistance at 35,150 was tripped but held. Continued closes above this level would indicate ongoing strength towards 35,250-35,500.

The Nasdaq closed at 14,840 (+0.03) with the fresh lifetime and intraday high reaching 14,863. Key resistance at 14,850 was cleared but held. A close above this level would suggest momentum towards 15,000-15,150.

Market Movers

Shares of ATI Physical Therapy (ATIP) sank 43% after missing quarterly revenue numbers. The company said revenue came in at $164 million versus expectations of $175 million while adding it does not intend to provide revenue guidance as a future metric going forward.

Volatility Index

The Volatility Index (VIX) snapped a four session after testing a high of 19.39. Prior and lower resistance at 19-19.50 was breached but held along with the 50-day moving average. A move above the latter would indicate strength towards 20-20.50.

Support is at 17-16.50.

Market Analysis

The Spider Small-Cap 600 ETF (NYSE: SLY) was up for the second-straight session with the intraday high reaching $94.87. Current and lower resistance at $94.50-$95 was tripped but held by a penny. A pop above the latter would indicate additional strength towards $96-$96.50 and the 50-day moving average.

Support is at $93.50-$93.

RSI (relative strength indicator) is in an uptrend with lower resistance at 45-50 getting recovered. A close above the latter would suggest additional strength towards 55-60 and levels from early June. Key support is at 40.

Sector

The Real Estate Select Sector SPDR Fund (NYSE: XLRE) was unchanged with the low hitting $45.88. Upper support at $46-$45.50 was breached but held. A close below the latter would suggest additional weakness towards $45-$44.50 and the 50-day moving average.

Key resistance is at $46.50 with the all-time high from earlier this month at $46.54.

RSI has flatlined key support at 60 holding. A close below this level would suggest a retest towards 55-50 and levels from mid-May. Resistance is at 65-70.

Market Outlook

Boston Scientific (BSX), Corning (GLW), Ecolab (ECL), General Electric (GE), Hubbell (HUBB), Invesco (IVZ), JetBlue Airways (JBLU), Polaris Industries (PII), Raytheon Technologies (RTX), Sherwin-Williams (SHW), Stanley Black & Decker (SWK), United Parcel Service (UPS), Waste Management (WM) and Xerox (XRX) are some of the big names reporting numbers this morning.

Alphabet (GOOGL), Apple (AAPL), Juniper Networks (JNPR), Starbucks (SBUX), and Visa (V) will report numbers after the close with the first two likely having a big influence on Wednesday’s open.

Momentum Options Play List

Closed Momentum Options Trades for 2021: 19-11 (63%). 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.

International Game Tech (IGT, $20.19, up $0.12)

IGT August 22 calls (IGT210820C00022000, $0.60, unchanged)

Entry Price: $0.70 (7/21/2021)
Exit Target: $1.40
Return: -14%
Stop Target: None

Action: Shares tested a high of $20.51 with lower resistance is at $20.50-$20.75 getting breached but holding. Support is at $20-$19.75.

AT&T (T, $28.18, up $0.03)

T August 27 puts (T210820P00027000, $0.25, unchanged)

Entry Price: $0.42 (7/19/2021)
Exit Target: $0.85
Return: -40%
Stop Target: None

Action: Monday’s peak hit $28.24 with lower resistance at $28.25-$28.50 and the 200-day moving average getting challenged but holding for the sixth-straight session. Support remains at $27.75-$27.50.

GoDaddy (GDDY, $85.49, down $0.64)

GDDY August 97.50 calls (GDDY210820C00097500, $0.40, down $0.10)

Entry Price: $1.20 (7/7/2021)
Exit Target: $2.40
Return: -67%
Stop Target: None

Action: Upper support at $85.50-$85 failed to hold on the intraday fade to $85.03. Resistance is at $86-$86.50.

Himax Technologies (HIMX, $13.15, down $0.05)

HIMX August 20 calls (HIMX210820C00020000, $0.05, unchanged)

Entry Price: $1.00 (6/30/2021)
Exit Target: $2.00
Return: -95%
Stop Target: None

Action: Shares tapped a low of $12.68 with prior and upper support at $13-$12.75 getting breached but holding. Lowered resistance is at $13.25-$13.50 and the 50-day moving average.

Canoo (GOEV, $8.35, up $0.15)

GOEV August 10 calls (GOEV210820C00010000, $0.25, unchanged)

Entry Price: $1.10 (6/30/2021)
Exit Target: $2.20
Return: -77%
Stop Target: None

Action: Yesterday’s high touched $8.67 with lower resistance at $8.50-$8.75 getting cleared but holding. Support is at $8.25-$8.

An analyst upgraded their price target to $19 from $18 while keeping a buy rating on the stock. We need shares to make a run towards $11-$12 over the next few weeks to get back to even or make a profit.

Marathon Oil (MRO, $11.83, up $0.33)

MRO August 15 calls (MRO210820C00015000, $0.08, unchanged)

Entry Price: $0.70 (6/25/2021)
Exit Target: $1.40
Return: -89%
Stop Target: None

Action: Monday’s rebound reached $11.94 with lower resistance at $11.75-$12 getting recovered. Support at $11.50-$11.25.

Ford Motor (F, $14.03, up $0.21)

F August 18 calls (F210820C00018000, $0.05, unchanged)

Entry Price: $0.55 (6/9/2021)
Exit Target: $1.10
Return: -91%
Stop Target: None

Action: Lower resistance at $14-$14.25 was cleared and held with yesterday’s peak kissing $14.08. Support remains at $13.75-$13.50.