MomentumOptions.com Pre-Market Update for 11/30/2023
Bulls Push July Resistance
8:00am (EST)
Commentary
The stock market continued its recent choppiness with Wednesday’s mixed results keeping the major indexes in a tight trading range to close out the month. The neutral action follows an exciting month for the bulls who are still eyeing a run towards fresh 52-week peaks.
The Nasdaq settled in the red at 14,258 (-0.2%) despite the morning pop to 14,423. Lower resistance from mid-July at 14,300-14,450 was cleared but held. Continued closes above the latter and the one-year high at 14,446 would be a bullish signal for momentum to 14,600-14,750. Support is at 14,150-14,000.
The S&P 500 traded to a high of 4,587 before finishing slightly lower at 4,550 (-0.1%). Mid-July and lower resistance at 4,575-4,600 was tripped but held. A move above the latter and the 52-week peak at 4,607 would imply upside towards 4,650-4,700. Support remains at 4,500-4,450.
The Dow ended at 35,430 (+0.04%) after topping out at 35,579. Prior and lower resistance from early July at 35,500-35,750 was cleared but held. A pop above the latter and the August 1st 52-week peak at 35,679 would suggest a breakout to 36,000-36,250. Support is at 35,250-35,000.
Volatility Index
The Volatility Index (VIX) tested a low of 12.48 with key support at 12.50 holding. Continued closes below this level would signal weakness towards 12.25-12. Resistance is at 13-13.25 with backup at 14-14.25.
Thursday’s earnings announcements:
Before the open: Big Lots (BIG), Duluth Holdings (DLTH), Kroger (KR), TD Bank Group (TD), Titan Machinery (TITN)
After the close: Ambarella (AMBA), Dell Technologies (DELL), Domo (DOMO), Marvell Technology Group (MRVL), ULTA Beauty (ULTA), Zumiez (ZUMZ)
Economic news:
Initial Jobless Claims – 8:30am
PCE Price Index – 8:30am
Pending Home Sales Index – 10:00am
Market Thoughts
Tuesday’s intraday spike to 14.30 on the VIX and second-straight close at 12.69 follows last Friday’s close at 12.46 and late day fresh 52-week low of 12.45. We have been mentioning throughout November the VIX could trade down to 12.75 and a level that would need to be breached and held for several sessions for the major indexes to trip 52-week peaks.
This area has served as a bottom on the VIX that has also coincided with market peaks in June, July and September. The relationship between current resistance for the major indexes and “stretched” support for the VIX should become more clearer as December unfolds. We have highlighted continued closes above 15 on the VIX as a warnings signal the market is peaking.
The RSI (relative strength index) levels for the Nasdaq and S&P continue to stall near the 70 level and overbought territory. The Dow is at 72. We talked about this pin action in June and July with the highs at or a shade above 75 so nothing new on this front.
The Russell 2000 made a run at the monthly high at 1,829 with Wednesday’s peak at 1,827. The index recovered 1,800 and we said coming into the week continued closes above this level and the 200-day moving average would be a bullish development. The worry now is the action could imply a possible near-term double-top if higher highs aren’t made to close out the week.
A breakout on the small-caps could help the other major indexes over their near-term hurdles and their quest to push fresh one-year highs. However, a close below 1,750 on the Russell 2000 would be a huge red flag for near-term market weakness.
If there is a pullback into the weekend, key support levels for the rest of the major indexes are at: Nasdaq 14,200-14,050; S&P 4,525-4,475; and Dow 35,000-34,750.
We have updated our current trades so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2023: 32-9 (78%). 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.
AT&T (T, $16.30, up $0.12)
T January 16 calls (T240119C00016000, $0.62, up $0.08)
Entry Price: $0.40 (11/15/2023)
Exit Target: $0.80
Return: 55%
Stop Target: 45 cents, raise to 50 cents (Stop Limit)
Action: Raise the Stop Limit at 45 cents to 50 cents to further protect profits.
Lower resistance at $16.25-$16.50 was cleared but held with the peak reaching $16.33. Support remains at $16-$15.75 and the 200-day moving average.
Petróleo Brasileiro (PBR, $15.22, down $0.27)
PBR December 16 calls (PBR231215C00016000, $0.15, down $0.09)
Entry Price: $0.40 (11/2/2023)
Exit Target: $0.80
Return: -63%
Stop Target: None
Action: Shares tagged a low of $15.16 with upper support at $15.25-$15 failing to hold. A close below the latter and the 50-day moving average would force us out of the trade. Resistance is at $15.75-$16.
