Dear Momentum Options Subscriber,
The market is mixed heading into the second half of trading as the bulls are trying to put a cherry on top of a sweet week. The action has returned to a tight range with the bears sniffing fresh support that served as prior resistance.
Option expiration usually brings added volatility but we aren’t seeing that today with May expiration. Overall, the action is slightly bullish although the VIX remains above 12.50.
The Dow is down 21 points to 18,230 while the S&P 500 is lower by 2 points to 2,118. The Nasdaq is off 9 points to 5,041 and the Russell 2000 is declining 3 points to 1,241.
I have updated our current trades and I will be watching the action into the close like every Friday. There could Trade Alert ahead of the close, but, if you don’t hear from me, have a great weekend. I will be back Monday morning with a complete update.
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 12:15 p.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, $4.16, down $0.04)
RIGL September 5 calls (RIGL150918C00005000, $0.70, flat)
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. Support is at $4.
Diamond Foods (DMND, $29.37, down $0.25)
DMND June 31 calls (DMND150619C00031000, $0.90, down $0.10)
Entry Price: $0.45 (5/12/2015)
Exit Target: $1.35 (closed one third at $0.80 on 5/13/15)
Return: 93%
Stop Target: 75 cents (Stop Limit)
Action: Near-term resistance is at $30. If cleared, a run to $31-$32 could come. Support is at $28.
Sony (SNE, $32.62, up $0.43)
SNE June 32 calls (SNE150619C00032000, $1.45, up $0.20)
Entry Price: $0.70 (5/8/2015)
Exit Target: $1.75 (closed first half at $1.25 on 5/13/15)
Return: 96%
Stop Target: $0.95 (Stop Limit)
Action: Shares have traded to a fresh 52-week high of $32.63 today. This sets up a run to $33-$34. Support is at $31-$30.50.
Wells Fargo (WFC, $55.40, down $0.64)
WFC June 57.50 calls (WFC150619C00057500, $0.31, down $0.05)
Entry Price: $0.31 (5/4/2015)
Exit Target: $0.65
Return: 0%
Stop Target: None
Action: Resistance is at $56. Near-term support is at $55.50-$55.
Limelight Networks (LLNW, $4.20, up $0.03)
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, $16.70, up $0.02)
OPK June 16 calls (OPK150619C00016000, $1.05, flat)
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: 80 cents (Stop Limit)
Action: Resistance is at $17. Support is at $15.
Dot Hill Systems (HILL, $6.81, down $0.10)
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