Dear Momentum Options Subscriber,
Shares of Imax (IMAX, $34.93, up $1.67) are up 5% after the company announced better-than-expected earnings.
The company reported a profit of $0.30 a share on revenue of $102.5 million. Wall Street was looking for $0.25 a share on sales of $95 million.
It was a good quarter for the company as world-wide box office revenue is down year-over-year. However, 2015 is slated with a number of blockbuster hits and Imax remains one of the best theater experiences you can get.
I have been a fan of Imax since shares were below $3 back in 2008. Over the years, I have made bullish bets on Imax using options but wish I would have made it a long-term core holding as it would have been a nice 10-bagger for my retirement portfolio. There is still hidden value in Imax shares if all their current projects come to fruition.
As far as the broader market, the action is mixed once again with tech showing strength. The Dow is down 19 points to 18,010, while the S&P 500 is higher by a point to 2,101. The Nasdaq is gaining 18 points to 4,925 and the Russell 2000 is up a point to 1,228.
We have a couple of trades that will be in play after today’s close and on Friday with earnings. Given the risk/reward with these trades, I have decided to take half profits in a few other trades to reduce some of our exposure.
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 12:10 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.
Marvell Technology (MRVL, $16.38, up $0.15)
MRVL May 18 calls (MRVL150515C00018000, $0.55, up $0.03)
Entry Price: $0.50 (2/18/2015)
Exit Target: $1.00
Return: 10%
Stop Target: None
Action: Earnings are due out after today’s close, and I’m expecting shares to move 5%-8% on the news.
A run to $18 could be in the mix if Marvell’s numbers please Wall Street. An earnings miss could have shares testing $15.50- $15.25 and the 50-day moving average.
Western Union (WU, $19.28, down $0.02)
WU March 19 calls (WU150320C00019000, $0.60, down $0.05)
Entry Price: $0.40 (2/13/2015)
Exit Target: $0.80
Return: 50%
Stop Target: None
Action: Close half of the WU March 19 calls at current levels.
Shares have traded to a high of $19.33 today. Resistance is at $19.75-$20. Near-term support is at $19.25-$19 on a pullback.
Brocade Communications Systems (BRCD, $12.54, down $0.05)
BRCD March 13 calls (BRCD150320C00013000, $0.32, down $0.03)
Entry Price: $0.24 (2/13/2015)
Exit Target: $0.50-$0.75
Return: 33%
Stop Target: None
BRCD April 12 calls (BRCD150417C00012000, $0.95, flat)
Entry Price: $0.80 (12/31/2014)
Exit Target: $1.60
Return: 19%
Stop Target: None
Action: Close the entire position in the BRCD April 12 calls at current levels.
Earnings are due out after the close. Near-term support is at $12.25-$12 with additional help at $11.75 and the 50-day moving average. We’ll lighten our exposure by taking the gains in the BRCD April 12 calls, while leaving the cheaper BRCD March 13 calls in play.
Sony (SNE, $27.40, down $0.62)
SNE March 28 calls (SNE150320C00028000, $0.80, down $0.30)
Entry Price: $0.60 (2/12/2015)
Exit Target: $1.80
Return: 33%
Stop Target: None
Action: Close half of the SNE March 28 calls at current levels.
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, $16.36, down $0.32)
BSX March 15 calls (BSX150320C00015000, $1.50, down $0.20)
Entry Price: $0.45 (2/10/2015)
Exit Target: $2.50 (closed half at $1.34 on 2/18/15)
Return: 216%
Stop Target: $1.25 (Stop Limit)
Action: Support is at $16.25-$16. Resistance is at $17-$18 over the near-term.
AT&T (T, $34.30, down $0.20)
T March 36 calls (T150320C00036000, $0.08, down $0.02)
Entry Price: $0.26 (2/4/2015)
Exit Target: $0.75
Return: -69%
Stop Target: None
Action: Support is at $34.25-$34 and the 200-day moving average. Resistance is at $34.75-$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, $62.07, down $0.06)
CBOE March 67.50 calls (CBOE150320C00067500, $0.10, flat)
Entry Price: $0.80 (2/4/2015)
Exit Target: 60 cents on the other half (Limit Order), (closed half at $1.10 on 2/5/15)
Return: -25%
Stop Target: None
Action: 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. A close above $64 and the 50-day moving average would be bullish.
Veeva Systems (VEEV, $30.71, down $0.29)
VEEV February 31 calls (VEEV150220C00031000, $0.20, down $0.20)
Entry Price: $0.75 (1/8/2015)
Exit Target: 80 cents (Limit Order)
Return: -73%
Stop Target: None
Action: Close the entire position in the VEEV Feb 31 calls at current levels.
The Limit Order of 80 cents failed to trigger on this morning’s pop to $31.55, so exit now at market prices.
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