Dear Momentum Options Subscriber,
The bulls are trying to bounce back from a two-day drubbing, as they have shown strength throughout the day. The bears are still having trouble with the near-term support that has acted as a nice base over the past two weeks.
I’m expecting the rest of today’s action to remain slightly bullish to flat as Wall Street prepares for what should be a busy Friday.
The Dodd-Frank law bank “stress tests” will be released after the close, so the financial stocks will certainly be in play tomorrow. The results are designed to show if banks can survive another recession but aren’t being judged on dividend payments. I mentioned earlier this week that additional bank stress tests will come next week from the Federal Reserve as well.
Nonfarm payrolls are due out before tomorrow’s open, and they will also weigh on the market. A “lousy” jobs number will have the talking heads saying that the Fed will hold off on rate hikes, while a good report will heat up the debate for a rate increase.
I could care less about the possibility of a quarter-point rate hike because the economy is strong enough to handle it. The suit-and-ties seem to believe a rate hike will be detrimental to the current market rally.
Either way, the jobs report and unemployment rate will be debated six ways to Sunday, but I’m more interested in the technical aspect of the market by Friday’s close.
I mentioned that if the bulls can get through this week unscathed, higher highs are still in store for March.
The Dow is currently up 26 points to 18,123, while the S&P 500 is higher by a point to 2,099. The Nasdaq is gaining 12 points to 4,979, and the Russell 2000 is advancing 2 points to 1,233.
I have updated the current trades, so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 19-3-1 (83%). 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 12:45 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.
Atmel (ATML, $8.86, up $0.04)
ATML May 9 calls (ATML150515C00009000, $0.65, up $0.05)
Entry Price: $0.40 (3/4/2015)
Exit Target: $1.00
Return: 63%
Stop Target: $0.45 (Stop Limit)
Action: Take profits and sell to close a third of the ATML May 9 calls at current levels. Also, set a Stop Limit at $0.45 on the remaining 2/3-sized position.
Shares have traded to a high of $9.11 today, and I would like to see a close above $9 this afternoon. Support is at $8.50-$8.40.
Gogo (GOGO, $20.42, up $0.79)
GOGO May 20 calls (GOGO150515C00020000, $1.80, up $0.40)
Entry Price: $0.85 (3/2/2015)
Exit Target: $2.25 (closed half at $1.85 on 3/5/2015)
Return: 115%
Stop Target: $1.05, raise to $1.25 (Stop Limit)
Action: Raise the Stop Limit from $1.05 to $1.25 on the second half of the trade.
Shares have traded to a high of $20.63 today. I would like to see $20.25-$20 hold into the close. Support is still moving up and will try to hold at $19.75-$19.50 on a pullback.
BlackBerry (BBRY, $10.91, up $0.07)
BBRY June 13 calls (BBRY150619C00013000, $0.55, flat)
Entry Price: $0.60 (3/2/2015)
Exit Target: $1.20
Return: -8%
Stop Target: None
Action: BBRY has traded up to $10.95 today. Resistance is at $11. Support is at $10.75.
Yahoo! (YHOO, $43.90, down $0.09)
YHOO April 47 calls (YHOO150417C00047000, $0.65, flat)
Entry Price: $0.80 (2/26/2015)
Exit Target: $1.60
Return: -19%
Stop Target: None
Action: Resistance is at $45. Support is at $43-$42.
Western Union (WU, $19.46, down $0.19)
WU April 20 calls (WU150417C00020000, $0.30, down $0.05)
Entry Price: $0.36 (2/25/2015)
Exit Target: $0.75
Return: -17%
Stop Target: None
Action: Support is at $19.50. Additional help is at $19.25-$19. Resistance is at $19.75-$20.
American Express (AXP, $81.14, up $0.51)
AXP April 87.50 calls (AXP150417C00087500, $0.30, up $0.05)
Entry Price: $0.56 (2/25/2015)
Exit Target: $1.15
Return: -46%
Stop Target: None
Action: Resistance is at $81.50-$82. Support is at $80, and a close below this level could lead to $78.
Flextronics (FLEX, $11.97, up $0.02)
FLEX April 12 calls (FLEX150417C00012000, $0.40, flat)
Entry Price: $0.67 (2/24/2015)
Exit Target: $1.35
Return: -40%
Stop Target: None
Action: Support is at $11.75. Resistance is at $12-$12.25.
Marvell Technology (MRVL, $16.28, up $0.07)
MRVL May 18 calls (MRVL150515C00018000, $0.30, flat)
Entry Price: $0.50 (2/18/2015)
Exit Target: $1.00
Return: -40%
Stop Target: None
Action: Resistance is at $16.25-$16.50. Near-term support is at $16, followed by $15.75-$15.50 and the 50-day moving average.
Brocade Communications Systems (BRCD, $12.37, down $0.04)
BRCD March 13 calls (BRCD150320C00013000, $0.10, flat)
Entry Price: $0.24 (2/13/2015)
Exit Target: $0.50-$0.75
Return: -58%
Stop Target: None
Action: Support is at $12.25-$12, followed by the 50-day moving average. Resistance is at $12.50-$12.75.
JDS Uniphase (JDSU, $13.29, up $0.10)
JDSU March 14 calls (JDSU150320C00014000, $0.15, flat)
Entry Price: $0.78 (1/8/2015)
Exit Target: $1.00
Return: -81%
Stop Target: None
Action: Support is at $13. The break below the 50-day moving average was bearish, but the 100-day moving average held. Let’s see where shares are by Friday’s close before possibly pulling the plug.
Trades on Hold — other 2015 Portfolio Open positions (1): 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.
Trade on!
Rick Rouse
Editor and Chief Options Strategist
Momentum Options