MomentumOptions.com Mid-Market for 1/25/2018
Bitcoin Stays Volatile
3:20pm (EST)
Bitcoin Investment Trust (GBTC) is an ETF that seeks to mirror the price action of bitcoin and recently announced a 91-for-1 stock split of bitcoin. This will drastically reduce making GBTC more accessible to retail investors for around $18.35 at current levels. The split takes place on January 26th.
The current chart shows GBTC is struggling with near-term resistance at $1,700-$1,800 and the 50-day moving average. Continued closes above the latter could lead to a short-term recovery towards the $2,000-$2,250 area. Near-term and shaky support is at $1,500-$1,400 with a close below the latter signaling additional weakness.
RSI is trying to clear resistance at 50 and a level that served as prior support and early November and December support. Continued closes above this level would be a slightly bullish development. A move below 40 would signal additional upcoming weakness.
GBTC does NOT currently trade options and it remains to be seen if it will following the split. In any event, there is an opportunity to TRADE the volatility instead of worrying about if you should BUY, or should have bought, bitcoin.
At some point, bitcoin will prove either prove itself as a viable currency option, or not. While other investors and pundits have bought into the hype, I always say never fall in love with an investment, or idea, that you can’t walk away away from, no matter how good it looks.
We can trust bitcoin will remain volatile for the foreseeable future and that is great for option traders. However, any options that are available to trade on bitcoin now, or in the future, will be expensive to trade until volatility settles.
Turning our attention to the market, the Dow is up 60 points to 26,313 while the S&P 500 is off 3 points to 2,833. The Nasdaq is lower by 17 points to 7,397 and the Russell 2000 is down 4 points to 1,595.
I have updated our current trades so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2018: 5-1 (83%). 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.
CNX Resources (CNX, $14.62,down $0.05)
CNX February 15 calls (CNX180216C00015000, $0.50, flat)
Entry Price: $0.50 (1/23/2018)
Exit Target: $1.00
Return: 0%
Stop Target: None
Action: Support is at $14.50-$14.25. Near-term resistance is at $15-$15.25.
Cypress Semiconductor (CY, $16.95, down $0.18)
CY February 18 calls (CY180216C00018000, $0.35, down $0.05)
Entry Price: $0.60 (1/23/2018)
Exit Target: $1.20
Return: -39%
Stop Target: None
Action: Support is at $16.75. Resistance is at $17.25-$17.50.
Blackberry (BB, $13.06, down $0.19)
BB March 15 calls (BB180316C00015000, $0.25, down $0.05)
Entry Price: $0.47 (1/16/2018)
Exit Target: $1.00
Return: -38%
Stop Target: None
Action: Support is at $13. Resistance is at $13.25.
Apache (APA, $47.68, down $0.44)
APA February 50 calls (APA180216C00050000, $1.00, down $0.15)
Entry Price: $1.07 (1/16/2018)
Exit Target: $2.10
Return: -6%
Stop Target: None
Action: Resistance is at $48.25-$48.50. Support is at $47.75-$47.50.
Cadence Design Systems (CDNS, $44.84, down $0.54)
CDNS February 48 calls (CDNS180216C00048000, $0.50, down $0.10)
Entry Price: $0.70 (1/16/2018)
Exit Target: $1.40
Return: -27%
Stop Target: None
Action: Support is at $44.75-$44.50. Resistance is at $45.