MomentumOptions.com Pre-Market Update for 7/30/2021

Dow/ S&P 500 Push New All-Time Peaks

8:00am (EST)

The stock market rose on Thursday despite weaker-than-expected economic news and a mixed batch of earnings results. Specifically, gross domestic product grew at a 6.5% annual rate for the second quarter versus expectations for 8.5% growth.

Additionally, jobless claims fell 24,000 to 400,000 versus forecasts for a print of 380,000. Despite the misses, the broader market and blue-chips broke out to fresh record highs with the small-caps showing the most strength for the second-straight session.

The Russell 2000 tested a high of 2,256 before finishing at 2,240 (+0.7%). Prior and lower resistance at 2,250-2,275 was breached but held. A close above the latter and the 50-day moving average would be an ongoing bullish development with additional upside towards 2,300-2,325. Below is a chart of the IWM.

The Dow settled at 35,084 (+0.4%) after tapping a midday and all-time high of 35,171. Key resistance at 35,150 was tripped but held. Continued closes above this level would indicate additional strength towards 35,250-35,500.

The S&P 500 tagged a record high of 4,429 while ending at 4,419 (+0.4%). Unchartered territory and lower resistance at 4,425-4,450 was challenged but held. A pop above the latter would suggest additional upside towards 4,450-4,475.

The Nasdaq made a run to 14,833 before closing at 14,778 (+0.1%). Key resistance at 14,850 was challenged but held. A close above the latter and Monday’s all-time high at 14,863 keeps upside towards 15,000-15,150 in play.

Market Movers

Shares of Robinhood (HOOD) fell 8% after pricing near the low end of its initial public offering range of $38. The company sold over 52 million shares, raising close to $2 billion.

Volatility Index

The Volatility Index (VIX) was down for the second-straight session with the low hitting 17.19. Key support 17.50 was breached but held. A close below this level and the 50-day moving average would be a bullish signal for a retest towards 16.50-16.

Lowered resistance is at 18-18.50 followed by 19.50-20.

Market Analysis

The iShares Russell Growth 1000 ETF (NYSE: IWF) traded to a high of $283.65 with lower resistance at $283.50-$284 getting cleared but holding. A move above the latter and Monday’s all-time peak at $284.47 would suggest a breakout towards $286-$286.50.

Support is at $282-$281.50 followed by $280-$279.50.

RSI is a slight uptrend with key resistance at 70 holding. Continued closes above this level would suggest strength towards 75-80 and the overbought highs from earlier this month. Support is at 65-60.

Sector

The Consumer Staples Select SPDR Fund (NYSE: XLP) was up for the fourth time in five sessions with the high kissing $71.59. Current and lower resistance at $71.50-$72 was tripped but held. A close above the latter and Tuesday’s all-time peak at $71.98 would signal momentum towards $73-$73.50.

Support is at $71-$69.50.

RSI is back in an uptrend trend with key resistance at 60 getting recovered. Continued closes above this level would suggest upside towards 65-70. Support is at 55-50.

Market Outlook

Amazon (AMZN) shares were up nearly 7% after Thursday’s closing bell after reporting a blowout quarter. The company posted a profit of $3.27 a share on revenue of just above $51.04 billion versus forecasts of $1.26 a share on revenue of $49.8 billion.

This should give the broader market and the Nasdaq a nice lift on this morning’s opening with the latter likely making a run towards the 15,000 area.

Momentum Options Play List

Closed Momentum Options Trades for 2021: 19-14 (58%). 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.

Cisco Systems (CSCO, $55.07, up $0.30)

CSCO August 57 calls (CSCO210820C00057000, $0.62, up $0.10)

Entry Price: $0.65 (7/29/2021)
Exit Target: $1.30
Return: -5%
Stop Target: None

Action: Lower resistance at $55-$55.50 was recovered on the rebound to $55.35. A close above the latter and Monday’s 52-week peak at $55.65 would be a bullish signal for additional strength towards $57-$57.50. Support is at $54.50-$54.

The all-time peak is just above $77 from March 2000. We only need a push past $58.30 over the next three weeks to get a double-up on this trade with earnings due out the week after next.

International Game Tech (IGT, $19.26, down $0.61)

IGT August 22 calls (IGT210820C00022000, $0.35, down $0.20)

Entry Price: $0.70 (7/21/2021)
Exit Target: $1.40
Return: -50%
Stop Target: None

Action: Thursday’s low tapped $19.23 with upper support at $19.25-$19 getting clipped but holding. Resistance is at $19.50-$19.75.

Shares remain slightly oversold with RSI back near 30 again. Earnings are due out next Tuesday with the company topping forecasts by $1.09 in the prior quarter.

GoDaddy (GDDY, $84.27, down $0.72)

GDDY August 97.50 calls (GDDY210820C00097500, $0.20, down $0.10)

Entry Price: $1.20 (7/7/2021)
Exit Target: $2.40
Return: -83%
Stop Target: None

Action: Thursday’s low reached $84.21 with upper support at $84.50-$84 failing to hold. Resistance remains at $85-$85.50.

Canoo (GOEV, $8.12, down $0.26)

GOEV August 10 calls (GOEV210820C00010000, $0.15, down $0.05)

Entry Price: $1.10 (6/30/2021)
Exit Target: $2.20
Return: -85%
Stop Target: None

Action: Shares remain in a five-session trading range following the pullback to $8.12. Upper support at $8.25-$8 failed to hold. Resistance is at $8.50-$8.75.

Ford Motor (F, $14.39, up $0.53)

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: Prior and lower resistance at $14.75-$15 was cleared bur held along with the 50-day moving average. Fresh support is at $14.25-$14.