Dear Momentum Options Subscriber,
The latest meeting minutes from the Federal Open Market Committee (FOMC) are due out this afternoon, and another round of debate on interest rates will surely follow afterwards. I would love to see an interest rate hike today just to end the speculation, but bets are being taken on a rate cut in June, September or in 2016.
I have said all along that I could care less what the Fed does because I trade the market both ways. If and when a correction comes, we will be ready. In the meantime, we will continue to play the trading range that began in February while we wait for another possible breakout.
Heading into the second half of trading, the Dow is down 85 points to 18,024, while the S&P 500 is lower by 9 points to 2,105. The Nasdaq is off 31 points to 5,023, and the Russell 2000 is declining 7 points to 1,252.
I have another Profit Alert today, so let’s go lock in our gains. I could also have a New Trade or additional Trade Alerts into the close, so stay locked and loaded.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 44-13-1 (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 12:15 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.
Krispy Kreme Doughnuts (KKD, $17.90, down $1.32)
KKD June 17 puts (KKD150619P00017000, $0.70, up $0.30)
Entry Price: $0.35 (4/28/2015)
Exit Target: $0.70-$1.05
Return: 100%
Stop Target: None
Action: Take profits and sell to close the first half the KKD June 17 puts at current levels.
Although there has been no headline news, shares are down 7% today and have fallen below their 200-day moving average. The next waves of support are at $17.50-$17. The stock is at a 2015 low, and the 52-week bottom is at $14.82.
iShares Russell 2000 (IWM, $124.34, down $0.82)
IWM May 127 calls (IWM150515C00127000, $0.50, down $0.20)
Entry Price: $0.70 (4/28/2015)
Exit Target: $1.40
Return: -30%
Stop Target: None
Action: There is risk to $124, but I like the trade as long as $123.50 holds. I’m looking for a run to $127-$128 over the near term.
Opko Health (OPK, $14.32, down $0.21)
OPK June 16 calls (OPK150619C00016000, $0.50, down $0.05)
Entry Price: $0.50 (4/27/2015)
Exit Target: $1.00
Return: 0%
Stop Target: None
Action: Support is at $14.50-$14.25 and the 50-day moving average. The 52-week high is at $15.23, and a close above $15-$15.25 should lead to a run at $16-$17 over the near term. Earnings are due out the second week of May.
Freeport-McMoRan (FCX, $22.91, up $0.23)
FCX June 23 calls (FCX150619C00023000, $1.15, up $0.05)
Entry Price: $0.55 (4/27/2015)
Exit Target: $1.60 (closed first half at $1.10 on 4/28/2015)
Return: 105%
Stop Target: $0.90 (Stop Limit)
Action: Shares have traded to a high of $22.97 today. Near-term resistance is at $23-$24. Fresh support will try to hold at $22.
TiVo (TIVO, $11.34, up $0.03)
TIVO June 12 calls (TIVO150619C00012000, $0.40, flat)
Entry Price: $0.30 (4/24/2015)
Exit Target: $0.90
Return: 33%
Stop Target: None
Action: The next layers of resistance are at $11.50-$12, followed by the 200-day moving average. Support is at $11-$11.25 and the 50-day moving average.
You can read my full update on TiVo in the April 27 Pre-Market Update. Earnings are due out in late May.
SunPower (SPWR, $33.29, down $0.51)
SPWR June 38 calls (SPWR150619C00038000, $0.62, down $0.08)
Entry Price: $0.95 (4/22/2015)
Exit Target: $1.90
Return: -35%
Stop Target: None
Action: Shares have tested backup support at $33 following today’s low of $33.03.
Earnings are due out tomorrow, April 30, and I covered what to expect in the April 27 Pre-Market Update. This trade will likely make a major move, and I plan to ride the storm out through June. The company’s partnership with Apple (AAPL) is something worth keeping an eye on.
Dot Hill Systems (HILL, $6.45, down $0.16)
HILL September 7.50 calls (HILL150918C00007500, $0.60, flat)
Entry Price: $0.45 (4/20/2015)
Exit Target: $1.35-$1.80
Return: 33%
Stop Target: None
Action: Resistance is at $6.50-$6.75, and a close above the latter would be bullish for a run at $7. Near-term support is at $6.25 on dips below $6.50. Earnings are due out on May 7, and I will cover the company’s numbers next week.
Jabil Circuit (JBL, $23.42, up $0. 09)
JBL May 24 calls (JBL150515C00024000, $0.25, flat)
Entry Price: $0.60 (4/10/2015)
Exit Target: $1.20
Return: -58%
Stop Target: None
Action: Near-term support is at $23 and the 50-day moving average. Resistance is at $23.50, followed by $24 and the 52-week high at $24.11.
Trades on Hold — other 2015 Portfolio Open positions (1): 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.
BlackBerry (BBRY) June 13 calls (from March 2015) — This is a speculation trade from early March on BBRY receiving a takeover offer of $14 or better by mid-June — Continue to hold.
Trade on!
Rick Rouse
Editor and Chief Options Strategist
Momentum Options