Dear Momentum Options Subscriber,
The market action today has played out much the same way that it has all week. Trading has been choppy as we wind down the last week of February.
The good news is that the first part of March should be strong, and I have talked about a coming “sweet spot.” Hopefully, history is on our side, as I’m still aggressively adding call options to the portfolio.
Heading into the second half of trading, the Dow is down 2 points to 18,222, while the S&P 500 is lower by a point to 2,112. The Nasdaq is gaining 17 points to 4,985, and the Russell 2000 is climbing 2 points to 1,237.
We locked in two double-digit winners this morning and, while one of those trades was expected, I mentioned that I might try to get back into the other name.
With that said, I have another New Trade for us. I could also have additional updates into the close, so stay locked and loaded.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 15-1 (94%). 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 12:50 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.
New Trade
CH Robinson Worldwide (CHRW, $73.92, up $0.38)
Buy to open the CHRW April 75 calls (CHRW150417C00075000, $1.30, up $0.05) at current levels.
I like these call options at current levels. They have traded down to $1.14, and the April 17 expiration date gives us nearly two months to play the run to new highs.
Current Trades
Western Union (WU, $19.65, up $0.04)
WU April 20 calls (WU150417C00020000, $0.40, up $0.05)
Entry Price: $0.36 (2/25/2015)
Exit Target: $0.75
Return: 11%
Stop Target: None
WU March 19 calls (WU150320C00019000, $0.80, up $0.05)
Entry Price: $0.40 (2/13/2015)
Exit Target: $0.80 (closed half at $0.60 on 2/19/2015)
Return: 75%
Stop Target: $0.48 (Stop Limit)
Action: Shares are on the verge of tripping $20 once $19.75 clears. There is additional fluff from the six-year chart up to $22 on closes above $20. Support is at $19.50-$19.25.
American Express (AXP, $83.20, up $1.03)
AXP April 87.50 calls (AXP150417C00087500, $0.75, up $0.15)
Entry Price: $0.56 (2/25/2015)
Exit Target: $1.15
Return: 34%
Stop Target: None
Action: Shares have traded to a high of $83.28 today. Resistance for AXP is at $82.50, followed by $84. Support is at $80 on a pullback.
Flextronics (FLEX, $12.40, up $0.11)
FLEX April 12 calls (FLEX150417C00012000, $0.70, up $0.05)
Entry Price: $0.67 (2/24/2015)
Exit Target: $1.35
Return: 4%
Stop Target: None
Action: Flextronics is on track to test $13 and could possibly make a run at $15 if Wall Street finds that the shares are cheap. Short-term support is at $12.25-$12 on a pullback.
GrubHub (GRUB, $42.41, down $0.05)
GRUB March 45 calls (GRUB150320C00045000, $0.90, down $0.05)
Entry Price: $0.55 (2/20/2015)
Exit Target: $2.00 (closed first half at $0.95 on 2/25/2015)
Return: 68%
Stop Target: $0.60 (Stop Limit)
Action: Set a Stop Limit at $0.60 on the second half of the trade to protect profits.
Shares have traded to a high of $44.08 today, with the options reaching $1.35.
The 52-week high is at $45.80. All three major moving averages are “curling” higher, with the 50-day crossing over the 100- and 200-day moving averages. The “golden crossover” looks bullish for a possible run to $50. Support is at $40.
Gogo (GOGO, $17.97, up $0.48)
GOGO March 18 calls (GOGO150320C00018000, $0.90, up $0.05)
Entry Price: $0.45 (2/20/2015)
Exit Target: $3.25 (Limit Order) (closed first half at $1.00 on 2/25/2015)
Return: 100%
Stop Target: $0.40, raise to $0.60 (Stop Limit)
Action: Raise the Stop Limit from $0.40 to $0.60 on the second half of the trade.
The options traded to a high of $1.49 after shares touched $18.92 on the open.
I would like to have seen more momentum at the open, but shares stalled at clearing $20. I would like to see $18 hold into the close.
Marvell Technology (MRVL, $16.15, down $0.19)
MRVL May 18 calls (MRVL150515C00018000, $0.30, down $0.05)
Entry Price: $0.50 (2/18/2015)
Exit Target: $1.00
Return: -40%
Stop Target: None
Action: Resistance is at $16.50-$16.75. Near-term support is at $16.
Brocade Communications Systems (BRCD, $12.87, up $0.40)
BRCD March 13 calls (BRCD150320C00013000, $0.27, up $0.12)
Entry Price: $0.24 (2/13/2015)
Exit Target: $0.50-$0.75
Return: 13%
Stop Target: None
Action: Resistance is at $12.50-$12.75. Yesterday’s high reached $12.57. Support is at $12.25-$12.
JDS Uniphase (JDSU, $13.38, down $0.01)
JDSU March 14 calls (JDSU150320C00014000, $0.28, down $0.02)
Entry Price: $0.78 (1/8/2015)
Exit Target: $0.50-$0.75
Return: -64%
Stop Target: None
Action: Resistance is at $13.75-$14. The breakeven point for the trade is at $14.25.
Trades on Hold — other 2015 Portfolio Open positions (3): 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.
Philip Morris (PM) March 75 puts (From January 2015) — Continue to hold.
AT&T (T) March 36 calls (From February 2015) — Continue to hold.
CBOE Holdings (CBOE) March 67.50 calls (From February 2015) — Closed first half at $1.10 on 2/5/15 — Continue to hold the second half.
Trade on!
Rick Rouse
Editor and Chief Options Strategist
Momentum Options