MomentumOptions.com Pre-Market for 2/21/2018
Bears Make an Appearance
8:00am (EST)
The market showed continued momentum during Tuesday’s session before losing steam and pulling back for the first time in seven sessions. The lackluster action comes ahead of tomorrow’s FOMC minutes and a number of key economic reports as traders seemed tentative ahead of the news.
The Dow fell 1% after trading in negative territory throughout the session while testing a low of 24,926 and closing back below the 25,000 level. The Russell 2000 declined 0.9% after failing resistance at 1,550 and the 50-day moving average for the second-straight session.
The S&P 500 stumbled 0.6% despite showing midday strength while holding the 2,700 level for the third-straight session. Meanwhile, the Nasdaq slipped 0.1% to extend its losing streak to 2-straight sessions. The index has been holding the 7,200 level for 3-straight sessions following last week’s 5.3% surge and best weekly percentage gain since December 2011.
Consumer Staples showed the most weakness with the sector falling 2.3% followed by Utilities which tumbled 1.3%. Health Care fell 1.1% while Real Estate and Industrials sank 1%. Technology was up 0.1% and was the only sector that closed higher.
The VelocityShares Daily Inverse VIX (ZIV) tested a low of 68.25 while closing back below the 70 level. Near-term support at 68-67.50 held with a move below the latter being a slightly bearish development. Resistance remains at 70.50-71.
The Russell 3000 Index ($RUA) fell 0.6% to snap a six-session winning streak after falling below 1,600 intraday but a level that held for into the closing bell. Near-term resistance is at 1,610-1,620 and the 50-day moving average held with continued closes above the latter being a bullish signal. Support is at 1,590-1,580 if 1,600 fails with a move below the latter signaling a possible short-term top.
RSI is trying to clear and hold resistance at 50 and prior November support. Continued closes above this level would be a slightly bullish development. Support is at 40.
The Consumer Staples Select Spiders (XLP) sank 2.2% after testing an intraday low of $54.28 while closing back below its 200-day moving average. Fresh support at $54.25-$54 held with a move below the latter signaling additional weakness. Lowered resistance is at $54.75-$55.
RSI is back in a downtrend after failing resistance at 50. Support is at 35-30 on continued weakness.
I could have New Trades today so stay close to you email inboxed or listen for a possible Text Alert throughout the morning.
Momentum Options Play List
Closed Momentum Options Trades for 2018: 7-5 (58%). All trades are dated and time stamped for verification. New subscribers can look at the past history to see how the trades have played out or to research our Track Records.
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 8am and 12pm–2pm (EST) updates. Also, I will usually give you a heads-up if I think I’m going to send a Trade Alert outside of these time frames.
Bank of America (BAC, $31.93, down $0.04)
BAC March 33 calls (BAC180316C00033000, $0.28, down $0.02)
Entry Price: $0.50 (2/15/2018)
Exit Target: $1.00
Return: -44%
Stop Target: None
Action: Upper support at $31.75-$31.50 held on yesterday’s low. Lowered resistance is at $32-$32.25.
Intel (INTC, $46.32, up $0.72)
INTC April 46 calls (INTC180420C00046000, $2.20, up $0.45)
Entry Price: $1.28 (2/14/2018)
Exit Target: $2.60
Return: 91%
Stop Target: $1.65, raise to $1.90 (Stop Limit)
Action: Raise the Stop Limit from $1.65 to $1.90 to further protect profits.
Fresh resistance is at $46.50-$46.75 following Tuesday’s push to $46.71. Rising support is at $46-$45.75. Option volume was heavy in a number of near-term weekly/ monthly options and at higher strike prices.
Viavi Systems (VIAV, $9.86, down $0.07)
VIAV March 10 calls (VIAV180316C00010000, $0.25, down $0.05)
Entry Price: $0.45 (2/6/2018)
Exit Target: $0.90
Return: -44%
Stop Target: None
Action: Upper support at $9.75-$9.50 held with yesterday’s low tapping $9.82. Resistance is at $10.