MomentumOptions.com Pre-Market for 2/16/2018
Bulls Trample 50-Day Moving Averages
8:00am (EST)
The market remained strong and in rebound mode after extending their winning streak to 5-straight sessions. Thursday’s gains were a continued bullish sign as the major indexes cleared their 50-day moving averages, for the most part. This follows Wednesday’s battle fighting to get back into positive territory for the year with the small-caps rejoining the major indexes following yesterday’s gains.
The Nasdaq once again led the way higher after soaring 1.6% after closing a half-point of its late session high of 7,256 while easily clearing and holding its 50-day moving average.
The S&P 500 rose 1.2% after racing to a late session high of 2,731 while closing above the 2,700 level for the first time in 9 sessions. The Dow also advanced 1.2% after reaching an intraday peak of 25,203. Both indexes held their 50-day moving averages by 8 and 50 points, respectively.
The Russell 2000 gained 1% after testing a high of 1,537 while falling 10 points shy of its 50-day moving average. The index is back in positive territory by 2 points for 2018.
Utilities showed the most strength with the sector surging 2% while Technology and Consumer Staples jumped 1.7% and 1.5%, respectively. Energy was the only sector to finish in the red after giving back 0.4%.
The VelocityShares Daily Inverse VIX (ZIV) was up for a second-straight session after trading to an intraday high of 70.43. Lower resistance at 70-70.50 held with continued closes above the latter being a bullish signal. Support is trying to move up to 68-67.50.
The PowerShares QQQ (QQQ) zoomed 1.9% after trading higher for the 5th-straight session while reaching an intraday peak of $165.70. Resistance at $165.50-$166 was split with continued closes above the latter leading to a possible push towards $167.50-$170. Today’s follow through on Wednesday’s close back above the 50-day moving average was a continued bullish signal. Rising support is at $165-$164.50 with risk to $162.50 on another move below the latter.
RSI is back in a nice trend after clearing resistance at the 50 level and looks posies to make a run at 70 on continued strength.
The Financial Select Sector Spiders (XLF) traded up to $29.14 shortly after the open to clear lower resistance at $29-$29.25. I mentioned in mid-January there was breakout potential to $30.50-$31 and levels that would be back in play on continued strength. Near-term support is at $28.75-$28.50 and the recently cleared 50-day moving average.
RSI will be trying to hold November support at 50 ahead of the upcoming 3-day weekend with resistance at 70-75 on continued closes above this level. The market is closed Monday for a holiday.
I have set a Stop Limit for ORCL following yesterday’s solid gains while raising the INTC Stop Limit to further protect profits.
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.
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Oracle (ORCL, $50.64, up $1.19)
ORCL March 50 calls (ORCL180316C00050000, $1.80, up $0.65)
Entry Price: $1.10 (2/15/2018)
Exit Target: $2.20
Return: 62%
Stop Target: $1.35 (Stop Limit)
Action: Set an initial Stop Limit at $1.35 to start protecting initial profits.
Fresh resistance is at $50.75-$51 following yesterday’s surge to $50.69. Rising support is at $50.25-$50.
Earnings are due out the week these options expire in mid-March. I would like to see shares rally into the announcement with possible triple-digit profits in the book before the news. The 52-week high is north of $53 and would be in play on continued closes above $51.50.
Bank of America (BAC, $32.21, up $0.21)
BAC March 33 calls (BAC180316C00033000, $0.40, up $0.01)
Entry Price: $0.50 (2/15/2018)
Exit Target: $1.00
Return: -20%
Stop Target: None
Action: Near-term resistance is at $32.50-$32.75 with the recent 52-week high at $32.67. Rising support is at $31.75-$31.50. These options traded over 15,000 contracts yesterday.
Intel (INTC, $45.92, up $0.54)
INTC April 46 calls (INTC180420C00046000, $2.00, up $0.10)
Entry Price: $1.28 (2/14/2018)
Exit Target: $2.60
Return: 67%
Stop Target: $1.40, raise to $1.65 (Stop Limit)
Action: Raise the Stop Limit from $1.40 to $1.65.
Fresh resistance is at $46-$46.25 following yesterday’s run to $45.99. Support is at $45.50-$45.25.
Viavi Systems (VIAV, $9.70, up $0.03)
VIAV March 10 calls (VIAV180316C00010000, $0.25, flat)
Entry Price: $0.45 (2/6/2018)
Exit Target: $0.90
Return: -44%
Stop Target: None
Action: Shares were surging 3% and tapping $10 in after-hours trading on Thursday following news of a share repurchase program.
Resistance is at $9.75-$10. Support is at $9.50.
