Dear Momentum Options Subscriber,
Wall Street has not been as “patient” as the Fed would like as the debate over interest rates continues. Janet Yellen is speaking today and told the zombies that when the Fed removes the word “patient” from its meeting minutes, that it would not automatically signal a rate hike.
While other catch phrases will likely arise from today’s (and tomorrow’s) discussions, I’m more interested in the market. The indexes are off their session highs but the continued push to all-time highs remains a bullish sign.
The Dow is gaining 71 points to 18,188 while the S&P 500 is up 3 points to 2,113. The Nasdaq is slipping 3 points to 4,958 and the Russell 2000 is higher by a point to 1,230.
I have a number of trades on my Watch List that are ready to roll, and I’m in the process of filtering out the best candidates. We have room for one or two possible new trades, and I mentioned this week would provide a great opportunity to build out our next batch of trades into April and May.
I could have New Trades ahead of the close but, for now, let’s go check on the current action.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 13-1 (93%). 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 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.
CH Robinson Worldwide (CHRW, $73.56, up $0.42)
CHRW March 75 calls (CHRW150320C00075000, $0.70, up $0.10)
Entry Price: $0.50 (2/23/2015)
Exit Target: $1.00-$1.50
Return: 40%
Stop Target: None
Action: Near-term resistance is at $75. Support is at $72-$71. The 52-week high is at $77.49.
GrubHub (GRUB, $41.06, up $0.64)
GRUB March 45 calls (GRUB150320C00045000, $0.65, up $0.15)
Entry Price: $0.55 (2/20/2015)
Exit Target: $1.10
Return: 18%
Stop Target: None
Action: Shares formed a “double-top” last August near $46 and overhead resistance is at $42. A close above this level should lead to a retest of $45-$46. The 52-week high is at $45.80. All three major moving averages are “curling” higher with the 50-day crossing over the 100/200-day moving averages. The “golden crossover” looks bullish for a possible run to $50. Support is at $40.
Gogo (GOGO, $16.38, up $0.34)
GOGO March 18 calls (GOGO150320C00018000, $0.50, up $0.10)
Entry Price: $0.45 (2/20/2015)
Exit Target: $0.90
Return: 11%
Stop Target: None
Action: Support is at $16-$15.75. Resistance is at $16.25. A move above $16.50 and the 200-day moving average could lead to a run towards $18.
Earnings are due out on Thursday, and you can read my thoughts on what to expect in Monday’s Pre-Market Update.
Marvell Technology (MRVL, $16.19, up $0.10)
MRVL May 18 calls (MRVL150515C00018000, $0.35, flat)
Entry Price: $0.50 (2/18/2015)
Exit Target: $1.00
Return: -30%
Stop Target: None
Action: Near-term support is at $16. There is additional help at $15.50 and the 50-day moving average. Resistance is at $16.50-$16.75.
Western Union (WU, $19.30, up $0.03)
WU March 19 calls (WU150320C00019000, $0.55, up $0.05)
Entry Price: $0.40 (2/13/2015)
Exit Target: $0.80 (closed half at $0.60 on 2/19/2015)
Return: 44%
Stop Target: 40 cents (Stop Limit)
Action: Resistance is at $20 with fluff up to $22. Support is at $19.25-$19.
Brocade Communications Systems (BRCD, $12.14, up $0.19)
BRCD March 13 calls (BRCD150320C00013000, $0.12, up $0.02)
Entry Price: $0.24 (2/13/2015)
Exit Target: $0.50-$0.75
Return: -50%
Stop Target: None
Action: Support is at $12-$11.75. Resistance is at $12.25-$12.50.
CBOE Holdings (CBOE, $62.70, down $0.30)
CBOE March 67.50 calls (CBOE150320C00067500, $0.10, down $0.05)
Entry Price: $0.80 (2/4/2015)
Exit Target: 60 cents on the other half (Limit Order), (closed half at $1.10 on 2/5/15)
Return: -25%
Stop Target: None
Action: A close above $64 and the 50-day moving average would be bullish. Support is at $61 and the 100-day moving average. A close below these levels could force me to exit the trade for a slight loss.
JDS Uniphase (JDSU, $13.40, up $0.05)
JDSU March 14 calls (JDSU150320C00014000, $0.30, flat)
Entry Price: $0.78(1/8/2015)
Exit Target: $0.50-$0.75
Return: -62%
Stop Target: None
Action: Resistance are at $13.75-$14. The breakeven point for the trade is at $14.25.
Trades on Hold — other 2015 Portfolio Open positions (2): 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.
Philip Morris (PM) March 75 puts (From January 2015) — Continue to hold.
AT&T (T) March 36 calls (From February 2015) — Continue to hold.
Trade on!
Rick Rouse
Editor and Chief Options Strategist
Momentum Options