MomentumOptions.com Pre-Market for 2/15/2018
Bulls Keep Momentum/ Profit Alert (MRVL)
8:00am (EST)
The market traded higher despite worry over inflation fears and weaker-than-expected economic news to extend its winning streak to 4-straight sessions. The continued follow through remains a bullish signal as the 50-day moving averages for the major indexes are back in play.
The Nasdaq showed the strongest gains after zooming 1.9% and trading to an intraday high of 7,152 while closing back above its 50-day moving average.
The Russell 2000 rallied 1.8% after making a run to 1,523 to close back above the 1,500 level for the first time in five sessions. The index is less than 2% away from its 50-day moving average.
The S&P 500 surged 1.3% after trading to a high of 2,702 while closing just below the 2,700 level. The Dow jumped 1% after testing n intraday peak of 24,925. With today’s gains, both indexes pulled within 1% of their 50-day moving averages.
Financials and Tech were the strongest sectors after rising 2.4% and 1.8%, respectively. Utilities and Real Estate were sector laggards after sliding 1.1% and 0.6%.
The VelocityShares Daily Inverse VIX (ZIV) made a run to 68.78 to bet fresh resistance is at 69.50-70 in play. Continued closes above the latter would be a bullish development for higher market highs. Shaky support is at 67.50-67 with backup help at 65-64.50.
The Spider S&P 500 ETF (SPY) was up for the 4th-straight session after testing an intraday high of $270. Fresh resistance is at $270.75-$271.50 and the 50-day moving average with continued closes above the latter being a bullish signal. Rising support is at $267.50-$267 with risk to $265-$262.50 on a move back below the latter.
RSI is back in an uptrend with near-term resistance at 50. Support is at 40.
The Spider Gold Shares (GLD) soared 1.6% after trading to a high of $128.59. January resistance at $128.50-$129 with a close above the latter being a continued bullish development for a run past $130 and fresh 52-week peaks. Rising support is at $127-$126.50.
RSI is in a slight uptrend and appears on track to test January and early September resistance at 70-75. Support is at 60.
Trading could continue to be choppy for another week or so but the good sign is the The S&P 500 Volatility Index ($VIX, 19.26, down 5.71) fell 23% and closed back below 20 yesterday. If the bulls can get the VIX below 17.50 ahead of the weekend, a continued v-shape recovery for the market is still in the cards.
I have a Profit Alert for MRVL this morning along with a Stop Limit on INTC.
Momentum Options Play List
Closed Momentum Options Trades for 2018: 6-5 (55%). 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.
Intel (INTC, $45.38, up $0.92)
INTC April 46 calls (INTC180420C00046000, $1.83, up $0.46)
Entry Price: $1.28 (2/14/2018)
Exit Target: $2.60
Return: 46%
Stop Target: $1.40 (Stop Limit)
Action: Set an initial Stop Limit at $1.40 to start protecting profits.
Resistance is at $45.50-$45.75 following yesterday’s run to $45.51. Rising support is at $45.25-$45. The close back above the 50-day moving average was a bullish signal for higher highs.
Volume was heavy in the INTC April 48 calls as they traded just shy of 10,000 contracts. This is signaling bullish traders are expecting a run towards $50 over the next 2 months. These call options closed just over $1 yesterday and I could add them as a piggy-back trade if shares clear $46 on continued momentum.
Viavi Systems (VIAV, $9.67, down $0.05)
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: Support is at $9.50 with Wednesday’s low tapping $9.58. Resistance remains at $9.75-$10.
Marvell Technology (MRVL, $22.26, down $0.06)
MRVL May 24 calls (MRVL180518C00024000, $0.90, down $0.10)
Entry Price: $0.83 (2/6/2018)
Exit Target: $1.70
Return: 2%
Stop Target: 85 cents (Stop Limit)
Action: The Stop Limit tripped on yesterday’s pullback to $22.
Lower support at $22.25-$22 held on yesterday’s low. Resistance remains at $22.50-$22.75 and the 50-day moving average. I still like the trade and could reenter the position today if shares can clear $22.50.
