MomentumOptions.com Pre-Market Update for 11/23/2022
Dow and S&P Push Trading Range Tops
8:00am (EST)
The stock market rebounded on Tuesday with the broader market and the blue-chips reclaiming key resistance levels. Volatility tested another new monthly low and comes ahead of today’s afternoon Fed minutes.
The Nasdaq finished at 11,174 (+1.4%) after making a late day push to 11,179. Key resistance at 11,250 was challenged and easily held. A move above this level would imply another trip to 11,350-11,500 with the monthly peak at 11,492.
The S&P 500 tagged a high of 4,005 while closing at 4,003 (+1.4%). Current and lower resistance at 4,000-4,025 was topped and held. A pop above the latter and the monthly high at 4,028 would suggest ongoing strength towards 4,050-4,100 and the 200-day moving average.
The Dow tapped a high of 34,115 before settling at 34,098 (+1.2%). Key resistance at 34,000 was cleared and held. Continued closes above this level keeps a run to 34,250-34,500 in play with the mid-August peak at 34,281.
The Russell 2000 ended at 1,860 (+1.2%) with the high hitting 1,861. Near-term and lower resistance at 1,850-1,875 was recovered. A close above the latter and the 200-day moving average would indicate a retest towards 1,900-1,925. Below is a chart of the IWM.
Volatility Index
The Volatility Index (VIX) was down for the fifth-straight day with the low at 21.28. Upper support at 21.50-21 was breached and held. A drop below the latter would signal weakness to 20-19 and the mid-August lows.
Lowered resistance is at 22.50-23.
Market Analysis
The Spider Small-Cap 600 ETF (SLY) rebounded following the intraday trip to $87.51. Lower resistance at $87.50-$88 was tripped but held. A move above the latter would indicate strength to $89-$89.50.
Support is at $86.50-$86.
RSI (relative strength indicator) is in a slight uptrend with key resistance at 60 getting cleared and holding. Continued closes above this level would suggest upside to 65-70 and levels from mid-August. Support is at 55-50.
Sector
The iShares PHLX Semiconductor ETF (SOXX) remained in a mini eight-session range with the peak reaching $377.73. Lower resistance at $377.50-$378 was cleared but held. A pop above the latter would indicate additional gains to $379.50-$380.
Support is at $366.50-$366.
RSI is back in an uptrend with key resistance at 60 getting recovered. Continued closes above this level would suggest upside action towards 65-70 and levels from last week. Support is at 55-50.
Market Outlook
The market is closed on Thursday and closes at 1pm (EST) on Friday. I will be traveling for the holiday to spend time with family so I won’t be publishing Friday but I will have a full update on Monday morning. However, if there is any action needed, or if a possible new trade is released today after the Fed news, I will send out a Text Alert.
Momentum Options Play List
Closed Momentum Options Trades for 2022: 25-18 (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.
Pure Storage (PSTG, $30.48, up $0.03)
PSTG December 32 calls (PSTG221216C00032000, $1.25, unchanged)
Entry Price: $1.75 (11/14/2022)
Exit Target: $3.50
Return: -29%
Stop Target: $1
Action: Shares touched a high of $30.60 with lower resistance at $30.50-$30.75 getting cleared but holding. Support is at $30-$29.75.
Verizon Communications (VZ, $39.20, up $0.58)
VZ December 40 calls (VZ221216C00040000, $0.50, up $0.10)
Entry Price: $0.55 (11/2/2022)
Exit Target: $1.10
Return: -10%
Stop Target: None
Action: Lower resistance at $39-$39.25 was cleared but held with the peak hitting $39.13. Support remains at $38.25-$38 and the 50-day moving average.
Rocket Companies (RKT, $7.38, down $0.03)
RKT December 8 calls (RKT221216C00008000, $0.30, unchanged)
Entry Price: $0.95 (9/9/2022)
Exit Target: $1.90
Return: -68%
Stop Target: None
Action: Upper support at $7.25-$7 was challenged but held with the low hitting $7.31. Resistance is at $7.50-$7.75.
Diana Shipping (DSX, $4.29, down $0.05)
DSX December 6 calls (DSX221216C00006000, $0.10, unchanged)
Entry Price: $0.40 (8/18/2022)
Exit Target: $1.00
Return: -75%
Stop Target: None
Action: Yesterday’s low kissed $4.28 with key support at $4.25 and the 50-day moving average holding. Resistance at $4.40-$4.50.