Dear Momentum Options Subscriber,
The bulls’ bandwagon got bigger on Thursday as Wall Street and Main Street jumped back on board. While there is a good chance higher highs come into play, there needs to be some follow through today as the VIX held 12.50 at Thursday’s close.
The Dow zoomed 191 points, or 1.1%, to settle at 18,252. The blue-chips opened higher and made a steady run at its all-time high of 18,288. The break above the top of the trading range reached a peak of 18,255. The close above 18,200 opened the door for a run to 18,350-18,500 over the near-term. Support is at 18,100-18,000.
The S&P 500 vaulted 22 points, or 1.1%, to close at 2,121. The index opened at 2,100 and the move above 2,115 by noon was a good sign the bulls might push the recent all-time high of 2,125. A close above this level likely gets 2,150-2,175 in play. Support is at 2,110-2,100.
The Nasdaq jumped 69 points, or 1.4%, to finish at 5,050. Tech recovered the 5,000 level after opening at 5,016. The index topped out at 5,051 and looks poised to test 5,100-5,150 over the near-term. The recent 52-week high is at 5,119. Support has moved up to 5,025-5,000.
The Russell 2000 soared nearly 13 points, or 1%, to end at 1,245. The small-caps opened 4 points higher but nearly fell into negative territory shortly afterwards. The index held green before making a push past 1,240 while going out at its session high. The next hurdles of resistance are at 1,250-1,260. Support is at 1,230-1,225 on a pullback.
The S&P 500 Volatility Index ($VIX, 12.74, down 1.02) opened below 13.50 and held this level throughout the day. The VIX touched a low of 12.72 intraday but failed at cracking 12.50. I have mentioned closes below this level would confirm all-time higher highs and hopefully we get there today.
We have some nice pin action going with our current trades and I have moved up two of our Stop Limits in Opko Health (OPKO) and Diamond Foods (DMND) to protect profits.
From desk to press, futures look like this: Dow (+26.00); S&P 500 (+3.25); Nasdaq 100 (+11.50).
Momentum Options Play List
Closed Momentum Options Trades for 2015: 47-15-1 (75%). 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 8:30 a.m. EST.
I hereby disclose that I will be participating in the following trade(s). 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.
Rigel Pharmaceuticals (RIGL, $4.20, up $0.10)
RIGL September 5 calls (RIGL150918C00005000, $0.70, up $0.10)
Entry Price: $0.50 (5/13/2015)
Exit Target: $1.00
Return: 40%
Stop Target: None
Action: Resistance is at $4.25 followed by $4.50. Thursday’s high reached $4.33. Support is at $4.
Diamond Foods (DMND, $29.62, up $0.43)
DMND June 31 calls (DMND150619C00031000, $1.00, up $0.10)
Entry Price: $0.45 (5/12/2015)
Exit Target: $1.35 (closed one third at $0.80 on 5/13/15)
Return: 107%
Stop Target: Raise from 50 cents to 75 cents (Stop Limit)
Action: Raise the Stop Limit from 50 cents to 75 cents.
Yesterday’s high touched $29.72. Near-term resistance is at $30. If cleared, a run to $31-$32 could come. Fresh support is at $28.
Sony (SNE, $32.19, up $0.19)
SNE June 32 calls (SNE150619C00032000, $1.25, up $0.05)
Entry Price: $0.70 (5/8/2015)
Exit Target: $1.75 (closed first half at $1.25 on 5/13/15)
Return: 79%
Stop Target: $0.95 (Stop Limit)
Action: The recent 52-week high is at $32.60. A close above this level should get $33-$34 in play. Support is at $31-$30.50.
Wells Fargo (WFC, $56.04, up $0.44)
WFC June 57.50 calls (WFC150619C00057500, $0.35, up $0.04)
Entry Price: $0.31 (5/4/2015)
Exit Target: $0.65
Return: 16%
Stop Target: None
Action: Resistance is at $56. Near-term support is at $55.50-$55.
Limelight Networks (LLNW, $4.17, up $0.06)
LLNW September 4 calls (LLNW150918C00004000, $0.60, flat)
Entry Price: $0.35 (4/29/2015)
Exit Target: $0.80 (Limit Order on half)
Return: 71%
Stop Target: $0.40 (Stop Limit)
Action: Resistance is at $4.20-$4.25. Support is at $4.
Opko Health (OPK, $16.68, up $1.01)
OPK June 16 calls (OPK150619C00016000, $1.05, up $0.40)
Entry Price: $0.50 (4/27/2015)
Exit Target: $1.00 (closed first half at $0.60 on 5/13/15)
Return: 65%
Stop Target: Raise from 45 cents to 80 cents (Stop Limit)
Action: Raise the Stop Limit from 45 cents to 80 cents.
Shares made a strong run at $17 on Thursday after reaching a peak of $16.72. Fresh support is at $15.
Dot Hill Systems (HILL, $6.91, up $0.06)
HILL September 7.50 calls (HILL150918C00007500, $0.60, flat)
Entry Price: $0.45 (4/20/2015)
Exit Target: $1.35-$1.80
Return: 33%
Stop Target: None
Action: Resistance is at $7. Support is at $6.75-$6.50.
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.
SunPower (SPWR) June 38 calls (from April 2015) — Resistance is at $32.75 and the 50-day moving average. Support is at $30 — Continue to hold.
BlackBerry (BBRY) June 13 calls (from March 2015) — This is a speculation trade from early March on BBRY receiving a takeover offer of $14 or better by mid-June — Continue to hold.
Trade on!
Rick Rouse
Editor and Chief Options Strategist
Momentum Options