MomentumOptions.com Pre-Market Update for 11/13/2023
Bulls Push Fresh November Highs
8:00am (EST)
Commentary
The stock market set another round of monthly highs on Friday to recover all of the previous session’s losses while posting another round of weekly gains. The breakout of a slight trading range was an ongoing bullish signal following a brief consolidation period.
The Nasdaq closed at 13,798 (+2.1%) after tapping a high of 13,802. Prior and lower resistance from early September at 13,700-13,850 was recovered. A pop above the latter would indicate further strength towards 13,950-14,100. Support is at 13,550-13,400 and the 50-day moving average.
The S&P 500 traded up to 4,418 before settling at 4,415 (+1.6%). New and lower resistance at 4,400-4,450 was cleared and held. A close above the latter and would suggest strength to 4,500-4,550. Support is at 4,350-4,300 and the 50-day moving average.
The Dow ended at 34,283 (+1.2%) with the peak hitting 34,310. Near-term and lower resistance at 34,250-34,500 was reclaimed. A move past the latter would imply a further run towards 34,750-35,000. Support is at 34,000-33,750.
Volatility Index
The Volatility Index (VIX) fell for the ninth time in 10 sessions with the low at 14.16. Upper support at 14.50-14 was breached and held. Continued closes below the latter would be an ongoing bullish development for the market with downside action towards 13.50-13. Resistance is at 15-15.50 followed by 16.50-17 and the 50-day moving average.
Monday’s earnings announcements:
Before the open: Kamada (KMDA), Modiv (MDV), Tyson Foods (TSN)
After the close: Danaos (DAC), Fisker (FSR), Navigator Holdings (NVGS), Rumble (RUM), Star Bulk Carriers (SBLK), Vicarious Surgical (RBOT)
Economic News
Treasury Budget – 2:00pm
Market Thoughts
For the week, the Nasdaq jumped 2.4%; the S&P 500 added 1.3%; and the Dow rose 0.7%. Technology was the strongest sector after soaring 2.6% over the past five sessions. There were no sector laggards.
On Thursday morning, we said the key resistance levels the bulls need to clear and hold into Friday’s close were at: Dow 34,250; S&P 4,400; and Nasdaq 13,700. The recovery of these levels were a big deal. The bulls not only pushed fresh November highs but the gains also passed October’s peaks. As a result, early September resistance levels are now in focus.
The RSI (relative strength index) levels for the major indexes are back in an uptrend after closing back above 60. The indexes easily held 50 on Thursday’s weakness and the bounce back keeps a run towards 70 in play.
A couple of concerns from last week was the action in small-caps and the technical setup on the blue-chips. As for the Russell 2000, it actually ended the week lower by 55 points, or 3%, and is currently in a downtrend channel. The index did hold the 1,700 level on Friday after testing lows of 1,635 and 1,633 in back-to-back sessions to close out October.
The small-caps typically show strength in mid-December and can set the tone for any possible Santa, or yearend rally. We will continue to watch this divergence in the weeks ahead.
As far as the Dow, we have talked about the possibility of the 50-day moving average falling below the 200-day moving average. This technical setup is known as a death-cross and typically leads to lower lows down the road. As of Friday’s close, these major MA’s are just seven points apart.
Speaking of Friday’s close, Moody’s Investors Service lowered their credit rating outlook for the U.S. to negative from stable, pointing to rising risks to the nation’s fiscal strength. Moody’s downgrade comes as Congress faces another threat of a government shutdown if a new funding bill isn’t introduced by November 17th.
We closed out our 28th winning trade on Friday that represented our sixth triple-digit winner following SNAP’s 157% payout. Since late July, we have now closed 11 out of last 12 trades for profits with the win rate rising to 76%. The portfolio is light with only one open position. We could add a new trade as early as this morning so stay locked-and-loaded and be on the lookout for a Text Alert.
Momentum Options Play List
Closed Momentum Options Trades for 2023: 28-9 (76%). 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 we list one. We will send out a “Profit Alert” or “New Trade” if we want you to close a position or if a new trade comes out. Otherwise, follow instructions at all times in the Otherwise, follow instructions at all times in the updates on Monday’s and Thursday’s along with the Text Alerts throughout the week.
Petróleo Brasileiro (PBR, $15.23, up $0.03)
PBR December 16 calls (PBR231215C00016000, $0.20, unchanged)
Entry Price: $0.40 (11/2/2023)
Exit Target: $0.80
Return: -50%
Stop Target: None
Action: Friday’s peak touched $15.36 with lower resistance at $15.25-$15.50 getting cleared but holding. Support is at $15-$14.75 and the 50-day moving average.
