Dear Momentum Options Subscriber,
Shares of Fossil Group (FOSL, $80.89, down $18.43) are tanking by 18% after the company missed Wall Street’s earnings estimates and offered a lowered outlook.
The company reported a profit of $3 a share on revenue of $1.06 billion. Analysts were looking for $3.10 a share on sales of $1.12 billion. Fossil said its current quarter earnings would come in at $0.59-$0.69 a share, but the suit-and-ties were looking for $1.25 a share. The company expects its 2015 profit to range from $5.45-$6.05 a share.
The luxury watch market is becoming increasingly competitive, and Fossil’s disappointment wasn’t really much of a surprise. Although shares have been in a strong uptrend for years, the wave of new players and watches flooding the market continues to grow.
The FOSL March 85 calls (FOSL150320C00085000, $5.90, up $4.90) would have been a great way to play the earnings release, as they are up a whopping 490%.
As far as the market, the bears are pushing support as the bulls take a breather. The Dow is down 30 points to 18,017, while the S&P 500 is lower by 4 points to 2,096. The Nasdaq is off a point to 4,896, and the Russell 2000 is slipping by half of a point to 1,224.
I could have a New Trade this afternoon or additional Profit Alerts, but, for now, let’s go check on the current trades.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 10-0 (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 12:05 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, $19.35, up $0.04)
WU March 19 calls (WU150320C00019000, $0.65, flat)
Entry Price: $0.40 (2/13/2015)
Exit Target: $0.80
Return: 63%
Stop Target: None
Action: Resistance is at $19.75-$20. Near-term support is at $19.25-$19 on a pullback.
Brocade Communications Systems (BRCD, $12.43, up $0.02)
BRCD March 13 calls (BRCD150320C00013000, $0.27, flat)
Entry Price: $0.24 (2/13/2015)
Exit Target: $0.50-$0.75
Return: 13%
Stop Target: None
BRCD April 12 calls (BRCD150417C00012000, $0.85, flat)
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, with additional help at $11.75 and the 50-day moving average. Resistance is at $12.75-$13.
Sony (SNE, $27.12, up $0.52)
SNE March 28 calls (SNE150320C00028000, $0.65, up $0.10)
Entry Price: $0.60 (2/12/2015)
Exit Target: $1.80
Return: 8%
Stop Target: None
Action: I have a near-term target of $30 for the stock. Support is at $27-$26. A close below $25 would suggest momentum is fading.
Boston Scientific (BSX, $16.40, up $1.56)
BSX March 15 calls (BSX150320C00015000, $1.50, up $1.05)
Entry Price: $0.45 (2/10/2015)
Exit Target: $1.25, raise to $2.00 (closed half at $1.34 on 2/18/15)
Return: 216%
Stop Target: $1.10 (Stop Limit)
Action: Raise the Exit Target from $1.25 to $2.00 on the second half of the trade. Also, set a Stop Limit at $1.10 to protect profits. The low on the calls today has been $1.26.
Shares are at fresh 52-week peaks and could make a run at $17. Fresh support is at $16.
AT&T (T, $34.55, down $0.16)
T March 36 calls (T150320C00036000, $0.10, down $0.02)
Entry Price: $0.26 (2/6/2015)
Exit Target: $0.75
Return: -62%
Stop Target: None
Action: Support is at $34.25-$34 and the 200-day moving average. 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.
CBOE Holdings (CBOE, $62.20, down $0.41)
CBOE March 67.50 calls (CBOE150320C00067500, $0.10, down $0.05)
Entry Price: $0.80 (2/4/2015)
Exit Target: $0.60 on the second half (Limit Order), (closed half at $1.10 on 2/5/15)
Return: -25%
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.
Veeva Systems (VEEV, $31.11, up $1.21)
VEEV February 31 calls (VEEV150220C00031000, $0.60, up $0.50)
Entry Price: $0.75 (1/8/2015)
Exit Target: $1.50, lower to $0.90 (Limit Order)
Return: -20%
Stop Target: None
Action: Lower the Exit Target from $1.50 to $0.90 and set a Limit Order to close the trade at this level.
The calls have traded to a high of $0.85 after shares reached a high of $31.78 this morning.
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