Dear Momentum Options Subscriber,
Shares of Etsy (ETSY, $28.90, up $12.90) are zooming higher by over 80% today following the company’s IPO (initial public offering). The offering was priced at $16 and raised $267 million on 16.7 million shares sold.
Party City (PRTY, $20.25, up $3.25) shares are up nearly 20% after making their IPO debut on the NYSE. The stock was priced at $17 by the underwriters and raised over $370 million on the sale of 21.9 million shares.
The IPO market has been heating up in recent weeks, and the offerings have been well received for the most part. This is a good sign of a healthy market.
Speaking of which, today’s action has favored the bears, but there is still the second half of trading to go. The Dow is down 3 points to 18,109, while the S&P 500 is lower by a point to 2,105. The Nasdaq is off 3 points to 5,007, and the Russell 2000 is declining 3 points to 1,272.
I have a Profit Alert today, as shares of SNE have pulled back. I could also have a New Trade ahead of today’s close, so stay locked and loaded.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 39-11-1 (76%). 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 1:20 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.
Sony (SNE, $31.06, down $0.69)
SNE May 31 calls (SNE150515C00031000, $1.20, down $0.40)
Entry Price: $0.70 (4/6/2015)
Exit Target: $2.10 (Limit Order on first half)
Return: 64%
Stop Target: $1.15 (Stop Limit)
Action: The Stop Limit of $1.15 has triggered on today’s backtest to $31, and we are now out of the trade. I’m disappointed that we were stopped out, but we can come back to trade SNE ahead of earnings on April 30, or sooner.
PowerShares QQQ Trust (QQQ, $107.68, down $0.16)
QQQ May 110 calls (QQQ150515C00110000, $0.60, down $0.05)
Entry Price: $0.60 (4/10/2015)
Exit Target: $1.20
Return: 0%
Stop Target: None
Action: Support is at $106. Continued closes above $108 will likely lead to a push to $110. The 52-week high is at $109.42.
Jabil Circuit (JBL, $23.70, down $0.25)
JBL May 24 calls (JBL150515C00024000, $0.60, down $0.10)
Entry Price: $0.60 (4/10/2015)
Exit Target: $1.20
Return: 0%
Stop Target: None
Action: Continued closes above $24 would be bullish for a run to $26-$28. Near-term support is at $23.50, followed by $23.
Rigel Pharmaceuticals (RIGL, $4.14, up $0.12)
RIGL June 5 calls (RIGL150619C00005000, $0.40, flat)
Entry Price: $0.25 (3/31/2015)
Exit Target: $0.75-$1.00
Return: 60%
Stop Target: None
Action: Resistance is at $4.20 and the 52-week high. A close above this level would be bullish for a possible run to $4.50-$5. Support is at $3.80-$3.60.
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.
Marvell Technology (MRVL) May 18 calls (from February 2015) — This sector could see heated M&A activity in the coming months, and MRVL tends to move on takeover chatter — Continue to hold.
BlackBerry (BBRY) June 13 calls (from March 2015) — This is a speculation trade that BBRY will receive a takeover offer of $14 or better by mid-June — Continue to hold.
Cypress Semiconductor (CY) June 16 calls (from March 2015) — Earnings have now been confirmed for April 30, before the market opens — Continue to hold.
Trade on!
Rick Rouse
Editor and Chief Options Strategist
Momentum Options