MomentumOptions.com Pre-Market Update for 2/17/2025
All-Time Highs Back in Focus
8:00am (EST)
Technical Outlook Video:
https://go.screenpal.com/watch/cTnDfonhyuS
The stock market is once showing signs of breaking out to fresh all-time highs despite Friday’s mostly lower close. The major indexes did make higher highs on the open following Thursday’s breakout session on news of President Trump initiating discussions to possibly end the Russian / Ukraine war.
The Nasdaq made a push to 20,045 while settling at 20,026 (+0.4%). Resistance at 20,000 was recovered. New support is at 19,750.
The S&P 500 went out at 6,114 (-0.01%) after tagging a high of 6,127. Resistance at 6,125 was cleared but held. Support is at 6,100.
The Dow tagged a low of 44,498 before closing at 44,546 (-0.4%). Support at 44,500 held. Resistance is at 45,000.
Earnings and Economic News
Before the open: None
After the close: Huntsman (HUN), Noble (NE), Transocean (RIG), Otter Tail (OTTR)
Economic News
Market Closed
Technical Outlook and Market Thoughts
Once again, there was some dip buying mid-week at key support levels that helped save the major indexes from possibly testing lows from earlier this month. The technical chart work also showed the impressive bounces to get fresh all-time highs back in focus on the Nasdaq and the S&P. The Dow and the Russell are lagging but also remain within striking distance of record highs.
The most important development on Friday showed volatility easing while pushing the January lows. The Volatility Index (VIX) closed below key support at 15 for just the second time this year. Continued closes below this level would be bullish for the market with additional weakness towards 13.50-12.75 and December lows.
Lowered resistance is at 16.50 and the 200-day and 50-day moving averages with the latter closing above the former. This is typically known as a golden cross that signals higher highs down the road and would be bearish for the market. Lower lows would reverse this setup and why the bulls need to hold 15 throughout the upcoming week. Additional resistance is at 17.50.
The Nasdaq recovered its 50-day moving average on Thursday while clearing key resistance at 19,750. Friday’s close above 20,000 gets 20,250-20,500 in play with the December 16th all-time high at 20,204.
Rising but shaky support is at 19,500 which represents the bottom of the uptrend channel. A drop below 19,250 would indicate a possible near-term top with weakness towards 19,000-18,750.
The S&P came within a point of topping its January 24th all-time high at 6,128 following Thursday’s breakout above key resistance at 6,100. Continued closes above this level would signal upside towards 6,200-6,250 and the middle of the current uptrend channel.
Support is at 6,050-6,000 and the 50-day moving average. A drop below the latter and out of the uptrend channel would imply a further slide to 5,950-5,900.
The Dow’s has remained in a 1,000-point range between 44,000-45,000 since January 23rd, or 18 trading sessions. Resistance is at 44,750-45,000. There is breakout potential towards 45,500-46,000 and the middle of the current uptrend channel on multiple closes above 45,000 and the December 4th all-time top at 45,073.
Support is at 44,250-44,000 with backup help at 43,750 and the 50-day moving average. A close below 43,500 and out of the current uptrend channel could lead to a retest to 43,250.
The Russell 2000 tested a high of 2,297 with key resistance at 2,300 holding. The 50-day moving average continues to rollover and has been a hassle since the December 18th close below this level. A breakout above 2,325 could lead to a fear-of-missing-out moment.
Key support is at 2,260 followed by 2,225-2,200 and the 200-day moving average.
The Financial sector is showing signs of breaking out with the Spider Select Financial Sector Fund (XLF) clearing $52 on Friday. The record high from earlier this month is at $52.26. The top of the current uptrend channel off the August low is showing a near-term price target of $55.
Key support levels are at $51 followed by $50 and the 50-day moving average. The XLF April 55 calls (XLF250417C00055000) closed at 25 cents and traded over 16,000 contracts versus open interest of 6,800 on Friday. This is suggesting traders are positioning for a move towards double-nickels by mid-April.
Other financial stocks are also showing signs of breaking out to record highs and a sector breakout could be a rising tide that lifts all boats.
The Transportation sector is also worth watching after the Dow Jones Transportation Average Index (DJT) reclaimed its 50-day moving average on Friday. Continues closes above key resistance at 16,800 would be a more bullish development. Key support at 15,800 and the 200-day moving average has been holding since mid-December.
The market is closed on Monday and likely why there was some hesitation for traders to keep positions open over a three-day weekend.
Momentum Options Play List
Closed Momentum Options Trades for 2025: 6-1 (86%) / 2024: 77-17 (82%, 38 triple-digit winners). Please remember, all “Exit Targets” and “Stop Targets” are targets. You should not have any “Stops” entered to close any alerts or “Limit Orders” in your brokerage account unless we list one. We will send out an “Alert” or “New Alert” if we want you to close a position or if a new position comes out. Otherwise, follow instructions at all times in the updates on Monday’s and Thursday’s along with Text Alerts and videos throughout the week.
Alerts Video:
https://go.screenpal.com/watch/cTnDFXnh41a
Bank of America (BAC, $46.96, up $0.63)
BAC March 49 calls (BAC250321C00049000, $0.45, up $0.10)
Entry Price: $0.45 (2/14/2025)
Exit Target: $0.90
Return: 0%
Stop Target: None
Action: Friday’s peak reached $47.09 with prior and lower resistance at $47-$47.25 getting cleared but holding. Support is at $46.50-$46.25.
The 50-day moving average held in back-to-back sessions and has been holding since mid-January. This includes the early February intraday dip below this level. Key resistance at $48 held in late November and the previous Thursday and Friday.
Continued closes above $48 could lead to a “triple-top breakout” with upside towards $55. The first hurdles would be at $49-$49.50 and resistance from January 2022. The all-time high from November 2006 is north of double-nickels.
Box (BOX, $35.35, down $0.05)
BOX March 38 calls (BOX250321C00380000, $0.80, unchanged)
Entry Price: $0.45 (2/4/2025)
Exit Target: $0.90
Return: 78%
Stop Target: 50 cents, raise to 60 cents (Stop Limit)
Action: Raise the Stop Limit from 50 cents to 60 cents.
Late November and lower resistance at $35.50-$35.75 was challenged and held with the peak at $35.45. The all-time high from November 26th is at $35.74. There could be a breakout towards $37.50-$40 if these levels are cleared and held. Support is at $35.25-$35.
Goodyear Tire & Rubber (GT, $9.58, up $1.41)
GT February 10 calls (GT250221C00010000, $0.20, up $0.15)
Entry Price: $0.30 (1/15/2025)
Exit Target: $0.40 (Limit Order)
Return: -33%
Stop Target: None
Action: Set a Limit Order at 40 cents. If shares fall back below $9 this week, exit to save the remaining premium.
Shares zoomed 17% with the calls skyrocketing 200% and the high reaching 35 cents. Over 28,000 contracts traded on Friday.
The alert is still down and the options expire this Friday. Continued strength and closes above $10 should get the Limit Order in play.
Rocket Companies (RKT, $13.10, up $0.24)
RKT February 10 puts (RKT250221P00010000, $0.10, unchanged)
Entry Price: $0.55 (1/10/2025)
Exit Target: $1.10
Return: -82%
Stop Target: None
Action: Friday’s top hit $13.45 with lower resistance at $13.25-$13.50 getting cleared but holding. Support at $13-$12.75.
Earnings are due out this Thursday. Like GT (and CSCO from last month), RKT could come down to the last day of expiration.