Dear Momentum Options Subscriber,
I mentioned this morning that fourth-quarter earnings were entering their final stretch as we wind down the season. However, there are still plenty of names to watch this week and into March as companies with different fiscal years report their numbers. April marks the start of first-quarter earnings season, so the cycle will repeat itself into May and June.
Chegg (CHGG), Express Scripts (ESRX), Tenet Healthcare (THC) and Texas Roadhouse (TXRH) are scheduled to report earnings after today’s close.
On Tuesday, Cracker Barrel Old Country (CBRL), Domino’s Pizza (DPZ), DreamWorks Animation (DWA), First Solar (FSLR), Home Depot (HD), Macy’s (M), Nordson (NDSN), Office Depot (ODP), Papa John’s International (PZZA), Sanderson Farms (SAFM), Tennant (TNC) and Valspar (VAL) are scheduled to report.
Wednesday’s highlights include Campbell Soup (CPB), Chesapeake Energy (CHK), Dollar Tree Stores (DLTR), Lowe’s Companies (LOW), Lumber Liquidators (LL), Target (TGT) and Sprouts Farmers Market (SFM).
On Thursday, 3D Systems (DDD), Crocs (CROX), CubeSmart (CUBE), Cyberonics (CYBX), Gogo (GOGO), Live Nation Entertainment (LYV), Marriott Vacations (VAC) and SeaWorld Entertainment (SEAS) step up to the podium.
Finally, Del Frisco’s Restaurant Group (DFRG), Horizon Pharma (HZNP) and Isis Pharmaceuticals (ISIS) will confess their numbers on Friday.
As far as the market, the indexes have spent the majority of the session underwater. Tech has traded in positive territory, however, and there is still another half to play ahead of the close.
The Dow is currently down 51 points to 18,088, while the S&P 500 is lower by 3 points to 2,107. The Nasdaq is up fractionally to 4,956, and the Russell 2000 is off less than a point to 1,231.
Our current trades are holding up well despite today’s slight dip. I could have a Profit Alert and/or possibly a New Trade this afternoon, so stay locked and loaded.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 12-1 (92%). 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 12:25 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.
GrubHub (GRUB, $40.49, down $0.87)
GRUB March 45 calls (GRUB150320C00045000, $0.55, down $0.20)
Entry Price: $0.55 (2/20/2015)
Exit Target: $1.10
Return: 0%
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. Short-term support is at $40. All three major moving averages are “curling” higher, with the 50-day crossing over the 100- and 200-day moving averages. The “golden crossover” looks bullish for a possible run to $50.
Gogo (GOGO, $16.09, down $0.13)
GOGO March 18 calls (GOGO150320C00018000, $0.45, down $0.05)
Entry Price: $0.45 (2/20/2015)
Exit Target: $0.90
Return: 0%
Stop Target: None
Action: A move above $16.50 and the 200-day moving average could lead to a run towards $18. Support is at $16-$15.75.
Earnings are due out on Thursday, and you can read my thoughts on what to expect in this morning’s Pre-Market Update.
Marvell Technology (MRVL, $16.12, down $0.17)
MRVL May 18 calls (MRVL150515C00018000, $0.35, down $0.10)
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.
These options have three months before they expire, and I’m expecting a run to $18-19 over the near term.
Western Union (WU, $19.29, down $0.17)
WU March 19 calls (WU150320C00019000, $0.60, down $0.10)
Entry Price: $0.40 (2/13/2015)
Exit Target: $0.80 (closed half at $0.60 on 2/19/2015)
Return: 50%
Stop Target: $0.40 (Stop Limit)
Action: Resistance is at $20, with fluff up to $22. Support is at $19.25-$19.
Brocade Communications Systems (BRCD, $12.01, down $0.05)
BRCD March 13 calls (BRCD150320C00013000, $0.10, down $0.20)
Entry Price: $0.24 (2/13/2015)
Exit Target: $0.50-$0.75
Return: -58%
Stop Target: None
Action: Support is at $12-$11.75. Resistance is at $12.25-$12.50.
Boston Scientific (BSX, $16.33, down $0.14)
BSX March 15 calls (BSX150320C00015000, $1.45, down $0.10)
Entry Price: $0.45 (2/10/2015)
Exit Target: $2.50 (closed half at $1.34 on 2/18/15)
Return: 222%
Stop Target: $1.35 (Stop Limit)
Action: Support is at $16.25-$16. Resistance is at $17-$18 over the near term.
CBOE Holdings (CBOE, $62.53, down $0.08)
CBOE March 67.50 calls (CBOE150320C00067500, $0.10, flat)
Entry Price: $0.80 (2/4/2015)
Exit Target: $0.60 on the second 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, $13.47, down $0.06)
JDSU March 14 calls (JDSU150320C00014000, $0.35, flat)
Entry Price: $0.78 (1/8/2015)
Exit Target: $0.50-$0.75
Return: -58%
Stop Target: None
Action: Resistance is 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