Dear Momentum Options Subscriber,
Although the bulk of fourth-quarter earnings season has passed, there are a number of notable companies reporting earnings this week. Here is a look at some of the names, and possible trades, I’m looking at this week:
After today’s close, CF Industries Holdings (CF), Jack in the Box (JACK), Photronics (PLAB) and Rackspace Hosting (RAX) will report their numbers.
On Wednesday, Denny’s (DENN), Duke Energy (DUK), Hilton Worldwide Holdings (HLT), Hyatt Hotels (H) and SolarCity (SCTY) are scheduled to announce earnings.
Brocade Communications Systems (BRCD), Cedar Fair Entertainment (FUN), Discovery Communications (DISCA), Famous Dave’s of America (DAVE), Hormel Foods (HRL), Imax (IMAX), Intuit (INTU), Newmont Mining (NEM), Noodles & Company (NDLS), Nordstrom (JWN), Public Storage (PSA), Rovi (ROVI), Wal-Mart Stores (WMT) and Six Flags (SIX) will confess their figures to Wall Street on Thursday.
And, on Friday, Cabot Oil & Gas (COG), Deere & Co (DE) and Health Care REIT (HCN) will wrap up the week with their numbers.
As far as the market, the action has been mixed, but the bulls are up heading into the second half of trading. The Dow is up 9 points to 18,029, while the S&P 500 is higher by 2 points to 2,099. The Nasdaq is gaining 3 points to 4,897, and the Russell 2000 is advancing 2 points to 1,225.
I have updated our current trades, one of which was stopped out for a slight profit, so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 9-0 (100%). All trades are dated and time stamped so new subscribers can look at the past history to see how the trades have played out.
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 “Hard Stops” entered to close any trades or “Exit 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 9 a.m. and 12 p.m. – 1 p.m. updates. Also, I will usually give you a heads-up if I think I’m going to send an email outside of these time frames.
All prices given in this update are current as of 1:15 p.m. EST.
Every new Momentum Options recommendation is listed with the price at which I entered my own position. If the price is slightly different than my recommended entry or exit price when you receive the alert, don’t let that keep you from getting into or out of a trade. Occasionally, you might even get a better “fill” price than what is posted in the Open Trades and Closed Trades.
Western Union (WU, $19.18, up $0.16)
WU March 19 calls (WU150320C00019000, $0.60, up $0.10)
Entry Price: $0.40 (2/13/2015)
Exit Target: $0.80
Return: 50%
Stop Target: None
Action: Shares have traded to a high of $19.30 today. Resistance is at $19.75-$20. Near-term support is at $19-$18.75 on a pullback.
Brocade Communications Systems (BRCD, $12.42, down $0.14)
BRCD March 13 calls (BRCD150320C00013000, $0.30, down $0.03)
Entry Price: $0.24 (2/13/2015)
Exit Target: $0.50-$0.75
Return: 25%
Stop Target: None
BRCD April 12 calls (BRCD150417C00012000, $0.85, down $0.10)
Entry Price: $0.80 (12/31/2014)
Exit Target: $1.60
Return: 6%
Stop Target: None
Action: Near-term support is at $12.25-$12 on a pullback, with additional help at $11.75 and the 50-day moving average. Resistance is at $12.75-$13.
Sony (SNE, $26.54, down $0.76)
SNE March 28 calls (SNE150320C00028000, $0.55, down $0.20)
Entry Price: $0.60 (2/12/2015)
Exit Target: $1.80
Return: -8%
Stop Target: None
Action: Support is at $27-$26. A close below $25 would suggest momentum is fading. I have a near-term target of $30 for the stock.
Boston Scientific (BSX, $14.84, down $0.15)
BSX March 15 calls (BSX150320C00015000, $0.45, down $0.10)
Entry Price: $0.45 (2/10/2015)
Exit Target: $0.90
Return: 0%
Stop Target: None
Action: Resistance is at $15. A close above this level gets the 52-week peak at $15.28 in play. Support is at $14.75-$14.50.
AT&T (T, $34.60, down $0.06)
T March 36 calls (T150320C00036000, $0.15, flat)
Entry Price: $0.26 (2/6/2015)
Exit Target: $0.75
Return: -42%
Stop Target: None
Action: Resistance is at $35. My near-term target is calling for a run to $37 by mid-March. The 52-week high is at $37.48. Support is at $34.25-$34 and the 200-day moving average.
CBOE Holdings (CBOE, $62.72, down $0.29)
CBOE March 67.50 calls (CBOE150320C00067500, $0.20, down $0.05)
Entry Price: $0.80 (2/4/2015)
Exit Target: $0.60 on second half (Limit Order), (closed half at $1.10 on 2/5/15)
Return: -19%
Stop Target: None
Action: A close above $64 and the 50-day moving average would be bullish. Support is at $61 and the 100-day moving average. A close below these levels could force me to exit the trade for a slight loss.
Marvell Technology (MRVL, $16.38, down $0.21)
MRVL March 17 calls (MRVL150320C00017000, $0.55, down $0.15)
Entry Price: $0.50 (2/3/2015)
Exit Target: $1.00
Return: 10%
Stop Target: $0.55 (Stop Limit)
Action: The Stop Limit of $0.55 has triggered. I’m a little disappointed we were stopped out, but our profits were protected. I could come back to this trade this week with another March or April call option if support holds.
Hilton Worldwide Holdings (HLT, $28.85, up $0.27)
HLT April 29 calls (HLT150417C00029000, $1.10, up $0.10)
Entry Price: $0.40 (1/8/2015)
Exit Target: $1.20 (closed half at $0.80 on 2/11/15)
Return: 138%
Stop Target: $0.70, raise to $0.85 (Stop Limit)
Action: Raise the Stop Limit from $0.70 to $0.85.
My near-term target is $29-$30. Earnings are due out on Wednesday.
Veeva Systems (VEEV, $29.89, down $0.23)
VEEV February 31 calls (VEEV150220C00031000, $0.20, down $0.05)
Entry Price: $0.75 (1/8/2015)
Exit Target: $1.50
Return: -73%
Stop Target: None
Action: The break-even point for the trade is at $31.75. Support is at $28 on a close below $29.50. Resistance is at $31-$32. The options expire this Friday and will be worthless if shares stay below $31.
Trades on Hold — other 2015 Portfolio Open positions (2): These are trades that are still open in the portfolio but are down over 50%. They have longer expiration dates and are on “hold” but are not worth mentioning until they turn around. This means I would not open any new positions. I’m still keeping track of the trades and will record the results accordingly when the trade closes or if the options expire. Click on the Open Trades and Closed Trades pages to see all open and closed positions.
JDS Uniphase (JDSU) March 14 calls (From January 2015) — Continue to hold.
Philip Morris (PM) March 75 puts (From January 2015) — Continue to hold.
Trade on!
Rick Rouse
Editor and Chief Options Strategist
Momentum Options