MomentumOptions.com Pre-Market Update for 12/5/2024
Record Highs Back in Focus
8:00am (EST)
The stock market showed ongoing strength Wednesday with the bulls pushing another round of all-time highs. Volatility was slightly elevated despite the up session but held a key level of resistance.
The Nasdaq tagged a high of 19,741 before closing at 19,735 (+1.3%). Fresh and lower resistance at 19,700-19,850 was cleared and held. Support is at 19,650-19,500.
The S&P 500 finished at 6,086 (0.6%) with the intraday peak reaching 6,089. Undefined and lower resistance at 6,050-6,100 was topped and held. Key support is at 6,000.
The Dow hit a high of 45,073 while ending at 45,014 (+0.7%). Key resistance at 45,000 was cleared and held. Support remains at 44,750-44,500.
Earnings and Economic News
Before the open: Candian Solar (CSIQ), Dollar General (DG), Kroger (KR), TD Bank (TD)
After the close: DocuSign (DOCU), GitLab (GTLB), Lululemon Athletica (LULU), ULTA Beauty (ULTA)
Economic news:
Initial Jobless Claims – 8:30am
Trade Deficit – 8:30am
Technical Outlook and Market Thoughts
All three of the major indexes hit fresh all-time highs yesterday and remain in solid uptrend channels. The Volatility Index (VIX) held 13.50 and a level that represents key resistance and prior support.
Our notes on the VIX from October 25th were closes below 17.50 would be bullish for the market into yearend. So far, so good.
We will update the rest of the charts in Monday’s update but we wanted to get to our current trades as we continue to have some beautiful pin action.
Momentum Options Play List
Closed Momentum Options Trades for 2024: 65-11 (85%, 32 triple-digit winners). 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 we list one. We will send out a “Profit Alert” or “New Trade” if we want you to close a position or if a new trade comes out. Otherwise, follow instructions at all times in the Otherwise, follow instructions at all times in the updates on Monday’s and Thursday’s along with the Text Alerts throughout the week.
Snap (SNAP, $12.62, down $0.24)
SNAP January 13 calls (SNAP250117C00013000, $0.85, down $0.10)
Entry Price: $0.40 (11/25/2024)
Exit Target: $0.80
Return: 113%
Stop Target: 60 cents (Stop Limit)
SNAP March 15 calls (SNAP250321C00015000, $1.30, down $0.10)
Entry Price: $0.65 (11/25/2024)
Exit Target: $1.30
Return: 69%
Stop Target: 80 cents (Stop Limit)
Action: Shares traded down to $12.58 with upper support at $12.50-$12.25 holding. A close below the latter and the 200-day moving average would be a slightly bearish signal. Resistance is at $13-$13.25. A close above the latter gets our near-term target of $13.75 in focus.
AT&T (T, $23.53, down $0.21)
T January 24 calls (T250117C00024000, $0.45, down $0.10)
Entry Price: $0.40 (11/25/2024)
Exit Target: $0.80
Return: 13%
Stop Target: None
Action: Tuesday’s fresh 52-week high reached $24.03 with new and key resistance at $24 getting cleared but holding. Continued closes above this level gets $24.50 and the top of the current uptrend channel in play. Support is $23.25-$23 with yesterday’s low at $23.37.
We have a 2025 Price Target of $28 for the stock which represents resistance from March 2020. The current yield on the stock is at 4.7%. If shares can clear $24.80 by mid-January (or sooner) we will lock-in at least a 100% return.
Ford Motor (F, $10.74, down $0.08)
F January 12 calls (F250117C00012000, $0.10, unchanged)
Entry Price: $0.25 (11/25/2024)
Exit Target: $0.50
Return: -60%
Stop Target: None
Action: Shares tagged a low of $10.59 with upper support at $10.75-$10.50 failing to hold. Resistance is at $11-$11.25.
The drop below the 50-day moving average reopens another backtest to $10.25 and the bottom of the three-month trading range. The current dividend yield is at 5.4%.
Newell Brands (NWL, $10.08, up $0.37)
NWL January 10 calls (NWL250117C00010000, $0.60, up $0.20)
Entry Price: $0.20 (11/25/2024)
Exit Target: $0.80
Return: 200%
Stop Target: 25 cents, raise to 30 cents (Stop Limit)
Action: Raise the Stop Limit at 25 cents to 30 cents.
Longer-term and lower resistance from September 2023 at $10-$10.25 was cleared and held with the 52-week peak hitting $10.18. We said a run towards $11-$11.50 could come by late January on continued closes above $10. Given the momentum, this could happen in December following yesterday’s 3.8% surge.
Support is at $9.75-$9.50. The dividend yield is currently at 2.9%.
Goodyear Tire & Rubber (GT, $10.81, up $0.07)
GT January 11 calls (GT250117C00011000, $0.55, down $0.05)
Entry Price: $0.25 (11/25/2024)
Exit Target: $1.00
Return: 120%
Stop Target: 50 cents (Stop Limit)
Action: Lower resistance at $10.75-$11 was cleared and held with the high at $10.89. Shaky support is at $10.50-$10.25 and the 200-day moving average. Our near-term target is $11.50.
SoFi Technology (SOFI, $16.32, up $0.44)
SOFI January 17 calls (SOFI250117C00017000, $1.15, up $0.10)
Entry Price: $0.55 (11/19/2024)
Exit Target: $1.10
Return: 109%
Stop Target: 95 cents (Stop Limit)
SOFI January 13 calls (SOFI250117C00013000, $3.70, up $0.30)
Entry Price: $0.65 (11/8/2024)
Exit Target: $4 (closed half at $3 on 11/21)
Return: 415%
Stop Target: $2.75 (Stop Limit)
Action: Key resistance from January 2022 at $16.50 was challenged but held with the high reaching $16.43. Support is at $16-$15.75.
We said if shares can clear and hold $15, there is a good chance a run towards $16-$17.50 could come quickly. The former represents resistance from late December 2021 with the latter being resistance from September 2021. At some point in 2025, shares could push $20-$25.
Pfizer (PFE, $25.23, down $0.33)
PFE January 22.50 puts (PFE250117P00022500, $0.10, unchanged)
Entry Price: $0.25 (11/19/2024)
Exit Target: $0.50
Return: -60%
Stop Target: None
PFE February 21 puts (PFE250221P00021000, $0.15, unchanged)
Entry Price: $0.25 (11/19/2024)
Exit Target: $0.50
Return: -40%
Stop Target: None
Action: Wednesday’s low kissed $25.18 with key support at $25.25 failing to hold. Resistance$25.75-$26.
There is still risk to $26.75-$27 on a close above $26.25 but we have plenty of time for the death-cross to play out. However, if shares clear $27 by yearend, we will likely exit the trades to save the remaining premium.