Dear Momentum Options Subscriber,
I spent all of last weekend and this week researching, plotting, digging and doing some chart painting. It is always important to have a game plan, especially as Wall Street has been on Spring Break. I’ve been doing the grind, and the good news is that the hard work should pay off.
We will be well prepared for whatever way the market sways over the next few weeks. If we can execute the game plan and it comes together, some healthy profits could be made.
Heading into final hours of trading, the Dow is up 8 points to 17,696, while the S&P 500 is higher by 2 points to 2,058. The Nasdaq is gaining 14 points to 4,877, and the Russell 2000 is climbing 4 points to 1,236.
This week provided a great map to a possible treasure chest. The market gave me a lot of good clues on how the end of March and the first few days of April might go. I tried to share all of them with you instead of letting the suit-and-ties overwhelm the airwaves. If all goes well, we will be cashing out winners with the market testing or hitting new highs.
I have updated the current trades, and I’ll have a detailed issue on Monday. I will start watching the action into the closing bell and can’t wait to start my weekend research. While I won’t rule out a New Trade later today if there is a nibble, if I don’t throw the bait, enjoy the weekend!
Momentum Options Play List
Closed Momentum Options Trades for 2015: 25-7-1 (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 1:30 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.
US Steel (X, $24.31, down $0.53)
X May 21 puts (X150515P00021000, $0.70, up $0.10)
Entry Price: $0.60 (3/26/2015)
Exit Target: $1.20
Return: 17%
Stop Target: None
Action: Resistance is at $25-$26. Support is at $24.
You can read my full thoughts on the trade in this morning’s Pre-Market Update.
Dot Hill Systems (HILL, $5.30, down $0.06)
HILL June 5 calls (HILL150619C00005000, $0.80, flat)
Entry Price: $0.65 (3/24/2015)
Exit Target: $1.30
Return: 6%
Stop Target: $0.69 (Stop Limit)
Action: The Stop Limit of $0.69 has triggered following today’s dip to $5.18, and we are now out of the trade.
Cypress Semiconductor (CY, $14.07, down $0.05)
CY April 16 calls (CY150417C00016000, $0.15, down $0.04)
Entry Price: $0.40 (3/18/2015)
Exit Target: $0.80
Return: -63%
Stop Target: None
CY June 16 calls (CY150619C00016000, $0.40, down $0.05)
Entry Price: $0.75 (3/18/2015)
Exit Target: $1.50
Return: -47%
Stop Target: None
Action: Support is at $14-$13.50 and the 100-day moving average on further weakness. Resistance is at $14.25-$14.50.
Veeva Systems (VEEV, $25.41, up $0.06)
VEEV April 29 calls (VEEV150417C00029000, $0.25, flat)
Entry Price: $0.60 (3/18/2015)
Exit Target: $1.20
Return: -58%
Stop Target: None
Action: Support is at $25. Resistance is at $26-$27 and the 200-day moving average.
Yahoo! (YHOO, $45.11, up $0.64)
YHOO April 47 calls (YHOO150417C00047000, $0.45, up $0.10)
Entry Price: $0.80 (2/26/2015)
Exit Target: $1.60
Return: -44%
Stop Target: None
Action: Shares have traded to a high of $45.67 today. Near-term support is at $44. Continued closes above $45 should lead to a run to $47-$48 and the 100-day moving average.
Additionally, the company will be announcing earnings the week these options expire, which is another reason I will likely hold the trade open. A 10% move on earnings could be in the cards, and that would put shares past $48 (or $40) if current levels hold.
Flextronics (FLEX, $12.34, flat)
FLEX April 12 calls (FLEX150417C00012000, $0.45, flat)
Entry Price: $0.67 (2/24/2015)
Exit Target: $1.35
Return: -33%
Stop Target: None
Action: Short-term resistance is at $12.50. Support is at $12 following the close below $12.25. A drop below $12 could force me out of the position.
Trades on Hold — other 2015 Portfolio Open positions (3): 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.
Marvell Technology (MRVL) May 18 calls (from February 2015) — Continue to hold.
BlackBerry (BBRY) June 13 calls (from March 2015) — Continue to hold.
Gogo (GOGO) April 23 calls (from March 2015) — Continue to hold.
Trade on!
Rick Rouse
Editor and Chief Options Strategist
Momentum Options