MomentumOptions.com Pre-Market Update for 5/22/2019
Bulls Rebound, Snap 2-Session Slide
8:00am (EST)
The market showed some strength on Tuesday following 2 days of selling pressure on reports the U.S. may be easing back some of the pressure concerning China. A softening of restrictions on American companies dealing with Chinese telecom companies for up to 90 days helped sentiment while disappointing Retail earnings weighed on gains.
The Russell 2000 rallied 1.3% while closing at its session high of 1,545. Near-term and lower resistance at 1,550-1,565 was challenged but held with a close above the latter and the 50/200-day moving averages being a more bullish signal for higher highs.
The Nasdaq jumped 1.1% following the intraday high of 7,804. Prior and lower resistance from late March at 7,800-7,875 was challenged but held with a close above the latter and the 50-day moving average possibly leading to additional momentum.
The S&P 500 gained 0.9% after tapping a morning high of 2,868. Fresh and lower resistance at 2,875-2,900 and the 50-day moving average held with a close above the latter signaling a possible near-term bottom.
The Dow was up 0.8% following the run to 25,898 ahead of the closing bell. Prior and lower resistance at 25,800-26,050 was cleared and held with a close above the latter and the 50-day moving average being a more bullish signal.
Materials were the sector standout after jumping 1.5% while Technology and Industrials jumped 1.2%.
Consumer Staples slipped 0.2% were the only sector that showed weakness.
The S&P 500 Volatility Index ($VIX) stayed deflated throughout the session while testing an intraday low of 14.81. Fresh and upper support at 14.50-14 held with a close below the latter and the 50-day moving average being a more bullish signal for the market.
Lowered resistance is at 15-15.50 followed by 16.50-17 and the 200-day moving average.
The Spiders Dow Jones Industrial Average ETF (DIA) snapped a 2-session slide after trading to a 2nd-half peak of $258.88. Near-term and lower resistance at $259-$259.50 was challenged but held. Continued closes above the $260 level and the 50-day moving average would confirm a possible near-term bottom and additional strength.
Current support is at $258-$257.50. A close below the latter would be a renewed bearish signal with risk towards the $255.50-$255 area.
RSI is in a slight uptrend with resistance at 50 and represents prior support from earlier this month. A move above this level would signal additional momentum towards 55-60. Support is at 45-40 with a move below the latter signaling additional weakness.
iShares MSCI Emerging Markets (EEM) closed higher for the first time in 4 sessions after making a run to $40.64. Near-term and lower resistance at $40.50-$40.75 was cleared and held. A close above $41 would be a slightly bullish signal with more important hurdles at $41.25-$41.50 and the 200-day moving average.
Current support is at $40.25-$40. A close below the latter and prior resistance from early January would be a renewed bearish development with risk towards the $39.50 level.
RSI is trying to form a near-term bottom while holding support at 30. A close back below this level keeps risk towards 25-20 and October 2018 lows in play. Resistance is at 35 with strength towards 40-45 on a move above this level.
Wednesday’s earnings announcements:
Before the open: Advanced Auto Parts (AAP), Analog Devices (ADI), Canadian Imperial Bank (CM), Eagle Point Credit (ECC), Golden Ocean Group (GOGL), KLX Energy Services (KLXE), Lowe’s (LOW), Photronics (PLAB), Target (TGT), VF Corp (VFC)
After the close: Copart (CPRT), ePlus (PLUS), L Brands (LB), Modine Manufacturing (MOD), NetApp (NTAP), Shoe Carnival (SCVL), Synopsys (SNPS), Taro Pharmaceutical (TARO), Vipshop Holdings (VIPS)
I have made another adjustment to out current T position so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2019: 19-7 (73%). 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 “Stops” entered to close any trades or “Limit Orders” in your brokerage account unless I list one. I will send out a “Profit Alert” or “NewTrade” if I want you to close a position or if a new trade comes out. Otherwise, follow instructions at all times in the Daily updates.
AT&T (T, $32.41, up $0.22)
T July 32 calls (T190719C00032000, $1.10, up $0.10)
Entry Price: $0.47 (5/15/2019)
Exit Target: $1.75
Return: 127%
Stop Target: 82 cents, raise to 95 cents (Stop Limit)
Action: Raise the Stop Limit at 82 cents to 95 cents to further protect profits.
Tuesday’s peak reached $32.64 with lower resistance at $32.50-$33 holding. Rising support is at $32.25-$32.
Cypress Semiconductor (CY, $15.41, up $0.35)
CY September 17 calls (CY190920C00017000, $0.60, up $0.10)
Entry Price: $0.75 (5/16/2019)
Exit Target: $1.50
Return: -17%
Stop Target: None
Action: Shares tested a high of $15.53 with upper resistance at $15.25-$15.50 holding. Support is trying to move up to $15.25-$15.
Marvell Technology (MRVL, $22.40, up $0.66)
MRVL June 25 calls (MRVL190621C00025000, $0.35, up $0.12)
Entry Price: $0.47 (5/16/2019)
Exit Target: $1.00
Return: -27%
Stop Target: None
Action: New and lower resistance at $22.50-$22.75 held on Tuesday’s trip to $22.62. Current support is at $22.25-$22.
Bank of America (BAC, $28.69, up $0.29)
BAC June 31 calls (BAC190621C00031000, $0.08, up $0.02)
Entry Price: $0.55 (5/8/2019)
Exit Target: $1.10
Return: -85%
Stop Target: None
Action: Lower resistance at $28.50-$28.75 was cleared and held on the push to the latter yesterday. Support is trying to move up to $28.50-$28.25.
Amicus Therapeutics (FOLD, $12.31, up $0.47)
FOLD July 15 calls (FOLD190719C00015000, $0.25, flat)
Entry Price: $1.10 (4/12/2019)
Exit Target: $2.20
Return: -77%
Stop Target: None
Action: Shares closed at the session peak with prior and lower resistance at $12.25-$12.50 holding into the close. Support is at $12-$11.75.