Dear Momentum Options Subscriber,
The waiting is almost over, as Wall Street continues to count down the minutes until the Fed’s latest policy statement. Regardless of the outcome, I will be glad once Janet Yellen speaks so some dust can settle.
On one interesting note, the S&P 500 Volatility Index ($VIX, 15.79, up 0.13) opened below 15 despite futures showing a nasty start to trading. The VIX opened at 14.60 and traded down to 13.69 shortly afterwards before spiking back above 15.
I spent some time this morning talking about the weird price fluctuations on the VIX overnight. I’m taking the action as a very bullish sign, but it remains to be seen.
I’m disappointed that FedEx (FDX, $172.12, down $3.59) shares are in the red despite an earnings beat for the quarter. The company topped Wall Street’s estimates by 13 cents a share but missed revenues by $100 million.
Looking ahead, FedEx also forecast earnings of $8.80-$8.95 a share for the 2015 fiscal year. This was slightly less than the $8.50-$9.00 a share analysts had penciled in.
Its results and outlook have weighed on the Dow Jones Transportation Average ($TRAN, 9,010, down 75), as the index is testing the 9,000 level. The good news is that the 50-day moving average is holding.
Ahead of the Fed’s announcement, the Dow is down 118 points to 17,730, while the S&P 500 is slipping 9 points to 2,065. The Nasdaq is lower by 16 points to 4,920, and the Russell 2000 is off a point to 1,241.
I could have additional Trade Alerts later this afternoon, but, for now, I have updated our current trades.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 22-6-1 (76%). 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 1:05 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.
Gogo (GOGO, $21.39, up $0.02)
GOGO April 23 calls (GOGO150417C00023000, $0.60, flat)
Entry Price: $0.55 (3/17/2015)
Exit Target: $1.10
Return: 9%
Stop Target: None
Action: Resistance is at $22. Support is at $21-$20.
NVIDIA (NVDA, $22.95, down $0.30)
NVDA April 23 calls (NVDA150417C00023000, $0.70, down $0.15)
Entry Price: $0.65 (3/16/2015)
Exit Target: $1.30
Return: 2%
Stop Target: $0.66 (Stop Limit)
NVDA May 24 calls (NVDA150515C00024000, $0.65, down $0.15)
Entry Price: $0.65 (3/16/2015)
Exit Target: $1.30
Return: 2%
Stop Target: $0.66 (Stop Limit)
Action: The Stop Limits of $0.66 on both the NVDA April 23 calls and NVDA May 24 calls have triggered on this morning’s dip to $22.82.
While this was frustrating, I wanted to limit our exposure on continued market weakness. I still like these trades and the stock and could get back into one or both of these options once shares reclaim $23.25.
Yahoo! (YHOO, $43.83, up $0.04)
YHOO April 47 calls (YHOO150417C00047000, $0.45, flat)
Entry Price: $0.80 (2/26/2015)
Exit Target: $1.60
Return: -40%
Stop Target: None
Action: Resistance is at $44. A close above this level would be super bullish. Near-term support is at $43.
Western Union (WU, $19.01, down $0.29)
WU April 20 calls (WU150417C00020000, $0.20, down $0.10)
Entry Price: $0.36 (2/25/2015)
Exit Target: $0.75
Return: -44%
Stop Target: None
Action: Support is at $19.25-$19. Resistance is at $19.50-$19.75.
American Express (AXP, $80.71, down $0.35)
AXP April 87.50 calls (AXP150417C00087500, $0.20, down $0.05)
Entry Price: $0.56 (2/25/2015)
Exit Target: $1.15
Return: -64%
Stop Target: None
Action: Resistance is at $83-$84 and the 50-day moving average. Support is at $80.
Flextronics (FLEX, $12.09, up $0.14)
FLEX April 12 calls (FLEX150417C00012000, $0.40, up $0.05)
Entry Price: $0.67 (2/24/2015)
Exit Target: $1.35
Return: -40%
Stop Target: None
Action: Resistance is at $12, and a close above this level would be bullish. Support is at $11.75-$11.50 and the 50-day moving average.
Marvell Technology (MRVL, $15.64, down $0.09)
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: Support is at $15.50-$15. Resistance is at $15.75-$16.
BlackBerry (BBRY, $9.74, up $0.02)
BBRY June 13 calls (BBRY150617C00013000, $0.25, flat)
Entry Price: $0.60 (3/2/2015)
Exit Target: $1.20+
Return: -58%
Stop Target: None
Action: Resistance is at $10 and the 200-day moving average. Support is at $9.75-$9.50. This is a speculation play that BBRY will get a takeover offer by mid-June.
Trade on!
Rick Rouse
Editor and Chief Options Strategist
Momentum Options