Dear Momentum Options Subscriber,
The bulls are following the same trading script they’ve used for the past three-plus months, as they are now trying to recover from a two-day pullback that pushed support. Today’s gains are helping to push resistance, and the bulls will try to hold those levels into the close.
Tomorrow’s nonfarm payrolls report is expecting to show that the economy added 227,000 jobs for April. The unemployment rate could trickle down from 5.5% to 5.4% if that is the case. My guess is that the actual number will be roughly 30,000 higher or lower. Wall Street wants to see a not-too-hot or not-too-cold number in order to keep the markets in check.
The Dow is currently up 107 points to 17,949, while the S&P 500 is higher by 10 points to 2,090. The Nasdaq is advancing 32 points to 4,952, and the Russell 2000 is adding 8 points to 1,227.
One of our current trades came into play earlier, as its Stop Limit was breached. The good news is that the trade made a 100% return in nine days. I’m still busy trying to find possible new trades, but, for now, let’s go check on our current positions.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 46-14-1 (75%). 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 1:15 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.
Krispy Kreme Doughnuts (KKD, $17.60, up $0.33)
KKD June 17 puts (KKD150619P00017000, $0.70, down $0.20)
Entry Price: $0.35 (4/28/2015)
Exit Target: $1.05 (closed first half at $0.70 on 4/29/2015)
Return: 100%
Stop Target: $0.70 (Stop Limit)
Action: The Stop Limit of $0.70 on the second half of the KKD June 17 puts has triggered, and we are now out of the position. Shares have traded to a high of $17, with the options testing a low of $0.65.
I will keep KKD on my Watch List for a possible re-entry point.
Wells Fargo (WFC, $55.00, up $0.08)
WFC June 57.50 calls (WFC150619C00057500, $0.30, flat)
Entry Price: $0.31 (5/4/2015)
Exit Target: $0.65
Return: -3%
Stop Target: None
Action: Support is at $54.50-$54. Today’s high has reached $55.19. Resistance is at $55-$55.50. The 52-week high is at $56.26.
Limelight Networks (LLNW, $3.94, down $0.04)
LLNW September 4 calls (LLNW150918C00004000, $0.45, flat)
Entry Price: $0.35 (4/29/2015)
Exit Target: $0.80 (Limit Order on half)
Return: 29%
Stop Target: $0.40 (Stop Limit)
Action: Support is at $3.80-$3.75 on continued weakness. Resistance is at $4.00-$4.20.
You can read my full update on LLNW in the May 1 Pre-Market Update.
Opko Health (OPK, $14.10, up $0.10)
OPK June 16 calls (OPK150619C00016000, $0.30, flat)
Entry Price: $0.50 (4/27/2015)
Exit Target: $1.00
Return: -40%
Stop Target: None
Action: Support is at $13.75-$13.50 on a continued pullback. Resistance is at $14-$14.25.
Earnings are scheduled to be released this week or early next. I have an unconfirmed date of this Friday. Analysts are looking for a loss of $0.08 a share on revenue of $23 million. I believe OPK will top these numbers.
Dot Hill Systems (HILL, $6.87, up $0.05)
HILL September 7.50 calls (HILL150918C00007500, $0.65, flat)
Entry Price: $0.45 (4/20/2015)
Exit Target: $1.35-$1.80
Return: 44%
Stop Target: None
Action: Shares have traded to a high of $7 today. Continue to hold. I will have a complete update on the position tomorrow morning.
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.
SunPower (SPWR) June 38 calls (from April 2015) — I will likely close this trade if support at $30 fails. Resistance is at $32.50 — Continue to hold.
iShares Russell 2000 (IWM) May 127 calls (from April 2015) — I would like to be out of this trade by this Friday, win, lose or draw — Continue to hold.
BlackBerry (BBRY) June 13 calls (from March 2015) — This is a speculation trade from early March on BBRY receiving a takeover offer of $14 or better by mid-June — Continue to hold.
Trade on!
Rick Rouse
Editor and Chief Options Strategist
Momentum Options