MomentumOptions.com Pre-Market Update for 7/24/2023
Tech Down for the Week
8:00am (EST)
Commentary
The stock market was mixed on Friday with the blue-chips extending their winning streak to 10-straight sessions while Tech fell for the second-straight day. Some of the sluggishness in Tech came following the Nasdaq 100 rebalancing and regular July options expiration.
The Nasdaq tagged a low of 14,020 before closing at 14,032 (-0.2%). Current and upper support at 14,000-13,850 was challenged and held. A drop below the latter would suggest a further pullback towards 13,750-13,600. Resistance is at 14,200-14,350 with last Wednesday’s 52-week peak at 14,446.
The S&P 500 settled at 4,536 (+0.03%) with the high at 4,555. Key resistance from August 2022 at 4,550 was cleared but held. Continued closes above this level and last Wednesday’s 52-week high at 4,578 would signal strength to 4,600-4,650. Support is at 4,500-4,450.
The Dow made a push to 35,340 while finishing at 35,227 (+0.01%). Lower resistance at 35,250-35,500 was cleared but held. A move above the latter and last Thursday’s 52-week high at 35,372 would imply ongoing upside to 35,750-36,000. Rising support is at 35,000-34,750.
Volatility Index
The Volatility Index (VIX) remains in a seven session trading range with the low touching 13.37. Upper support at 13.25-12.75 was challenged and held. A drop below the latter and the June 52-week low at 12.73 would indicate weakness to 12.25-11.75. Resistance is at 14-14.50.
Monday’s earnings announcements:
Before the open: Domino’s Pizza (DPZ), Ryanair Holdings (RYAAY)
After the close: Cleveland-Cliffs (CLF), F5 Networks (FFIV), Whirlpool (WHR)
Economic News
PMI Services Index – 9:45am
Market Thoughts
For the week, the Nasdaq fell 0.6%; the S&P 500 added 0.7%; and the Dow rose 2.1%. Energy and Healthcare were the strongest sectors after rising 3.5% for the week while Communication Services dropped 2.4% to pace the laggards.
It was no surprise the mixed earnings and outlooks for Netflix (NFLX) and Tesla (TSLA) halted the overall market momentum but we talked about overbought conditions coming into play. Both stocks fell for the second-straight session, as well.
The RSI (relative strength index) intraday levels for the S&P and the Nasdaq cleared 75 midweek. We mentioned this level held in June before a pullback occurred. Both corrected on Thursday and tried to level out Friday to give near-term neutral readings.
The Dow cleared 70 on Thursday and also leveled out on Friday. This represents key resistance from August 2022. We believe the record winning streak for the Dow is at 13 and could be in jeopardy if the blue-chips start the week off with another win.
Our Price Targets from July 3rd came into play last week and it is amazing how accurate they have become: “As far as possible market tops during earnings season this month and next: Dow 35,250-35,500; S&P 4,550-4,600; and Nasdaq 14,350-14,500.”
The Dow reached a peak of 35,372 on Thursday; the S&P tagged 4,578; the Nasdaq kissed 14,446. Wow! We mentioned in our bi-weekly video if the latter aforementioned price targets were reached there is further upside towards January 2022 resistance levels.
This levels are at: Dow 35,750-36,000; S&P 4,650-4,700; and Nasdaq 15,000-15,150.
The back half of the July 3rd forecast also has a time period of a possible market top during the end of this month or the first week of August. It remains to be seen if higher highs are already in or the extended price targets come into focus during the height of earnings season.
This week could be a big test for the bulls momentum as Big Tech earnings results start to trickle in. Some of the highlights include Alphabet (GOOGL) and Microsoft (MSFT) after Tuesday’s close and Amazon (AMZN) on Thursday. Also in focus next is the Federal Reserve’s policy decision.
There are a couple of trades we like this week so stay locked-and-loaded and be on the lookout for Text Alerts.
Momentum Options Play List
Closed Momentum Options Trades for 2023: 16-8 (67%). 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.
Iovance Biotherapeutics (IOVA, $7.67, up $0.05)
IOVA December 12.50 calls (IOVA231215C00012500, $0.70, down $0.05)
Entry Price: $0.80 (7/10/2023)
Exit Target: $1.60
Return: -13%
Stop Target: None
Action: Lower resistance at $7.75-$8 and the 50-day moving average were challenged but held with the session high kissing $7.73. Support is at $7.50-$7.25.
For new subscribers, please read the writeup from 7/13 or 7/20 on why we are bullish on the stock.