MomentumOptions.com Pre-Market Update for 11/30/2022
Lackluster Action Continues
8:00am (EST)
The stock market was mixed on Tuesday after trading in a tighter range with the blue-chips and the small-caps showing strength. Some of the tentativeness is likely due to a number of key economic updates coming later in the week, including another update on inflation and Friday’s jobs report.
The Nasdaq tested an intraday low of 10,944 before settling at 10,983 (-0.6%). Upper support at 11,000-10,850 failed to hold. A close below the latter and the 50-day moving average would be a slightly bearish development with additional weakness towards 10,750-10,600.
The S&P 500 finished at 3,957 (-0.2%) following the fade to 3,937. Near-term and upper support at 3,950-3,925 was tripped but held. A move below the latter would imply a retest to 3,900-3,875 and the 20-day moving average.
The Dow tapped a morning low of 33,662 while ending slightly higher at 33,852 (+0.01%). Current and upper support at 33,750-33,500 was breached but held. A drop below the latter would indicate additional weakness towards 33,250-33,000 and the 20-day moving average.
The Russell 2000 closed at 1,836 (+0.3%) after making a first half run to 1,846. Lower resistance at 1,850-1,875 was challenged and held. A pop above the latter and the 200-day moving average would signal another push to 1,900. Below is a chart of the IWM.
Volatility Index
The Volatility Index (VIX) was lower for the first time in three sessions following the intraday slide to 21.83. Fresh and upper support at 22-21.50 was breached but held. A drop below the latter would suggest weakness towards 20.50-20.
Resistance is at 22.50-23.
Market Analysis
The iShares Russell Growth 1000 ETF (IWF) was down for the third-straight session with the low tagging $222.48. Near-term and upper support at $222.50-$222 was tripped but held. A close below the latter would imply downside action to $220.50-$220.
Resistance is at $225-$225.50.
RSI (relative strength index) is in a downtrend with key support at 50 holding. A close below this level would suggest weakness towards 45-40 and this month’s lows. Resistance is at 55-60.
Sector
The Communication Services (XLC) snap a two session slide after kissing a late day peak of $49.55. Lower resistance at $49.50-$50 was cleared but held. A move above the latter would signal strength towards $51-$51.50.
Support is at $49-$48.50 and the 50/ 20-day moving averages.
RSI also held key support at 50. A fade below this level would indicate additional weakness towards 45-40. Resistance is at 55-60.
Market Outlook
The Nasdaq will need to hold key support at 10,750 if the index trades lower on the open, or at some point today. A break below this level and out of the bottom of the current trading range would be a slightly bearish development heading into December.
The VIX traded in another tight range following Monday’s spike higher. Once again, there is wiggle room up to 24 before Wall Street needs to worry about the bears. However, a bullish uptrend is unlikely to resume until the VIX falls back below 21.
Momentum Options Play List
Closed Momentum Options Trades for 2022: 25-19 (57%). 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, $29.45, down $0.08)
PSTG December 32 calls (PSTG221216C00032000, $0.80, down $0.05)
Entry Price: $1.75 (11/14/2022)
Exit Target: $3.50
Return: -53%
Stop Target: None
Action: Shares hit an intraday low of $29.38 with upper support at $29.50-$29.25 failing to hold. Resistance remains at $29.75-$30.
Earnings are due out after the closing bell.
Verizon Communications (VZ, $38.34, up $0.10)
VZ December 40 calls (VZ221216C00040000, $0.20, unchanged)
Entry Price: $0.55 (11/2/2022)
Exit Target: $1.10
Return: -63%
Stop Target: None
Action: Lower resistance at $38.25-$38.50 was reclaimed following the bounce to $38.37. Support is at $38-$37.75 and the 50-day moving average.
Rocket Companies (RKT, $7.83, up $0.23)
RKT December 8 calls (RKT221216C00008000, $0.30, up $0.05)
Entry Price: $0.95 (9/9/2022)
Exit Target: $1.90
Return: -68%
Stop Target: None
Action: Tuesday’s peak reached $7.90 with lower resistance at $7.75-$8 getting recovered. Support is at $7.50-$7.25.
