MomentumOptions.com Pre-Market Update for 6/5/2025
Market Clears Key Resistance Levels
* Tuesday’s pop above key resistance levels was a bullish signal for the major indexes as there was some follow thru on Wednesday. The bullish action this week has kept the uptrend channels intact and previous resistance will now try to hold as support going forward.
* At current levels, the S&P is just 3% away from a fresh all-time high while the Nasdaq is 4% shy of record highs. The Dow and the Russell have lagged this year’s action and are 6% and 18% away, respectfully, from lifetime peaks.
* Of course, fresh support levels are going to need to hold into the weekend and over the near-term while higher highs continue to be established. Volatility has eased but is also facing a key test over the next few sessions that could provide ongoing clues about a possible summer rally.
The stock market tagged fresh multi-month highs on Wednesday but finished mixed as weaker-than-expected economic news weighed on sentiment. Specifically, private payrolls increased by just 37,000 and represented the lowest reading in over two years.
The Nasdaq closed at 19,460 (+0.3%) after trading to a high of 19,493. Key resistance at 19,500 was challenged and held. Support is at 19,250.
The S&P 500 tested a high of 5,990 before settling at 5,970 (+0.01%). Key resistance at 6,000 held. Support is at 5,950.
The Dow went out at 42,427 (-0.2%) dispute the intraday peak hitting 42,645. Resistance at 42,500 was cleared but held. Support is at 42,250.
Earnings and Economic News
Before the open: Ciena (CIEN), Cracker Barrel (CBRL), Duluth Holdings (DLTH), Hello Group (MOMO), Land’s End (LE), Toro (TTC)
After the close: Broadcom (AVGO), DocuSign (DOCU), Petco (WOOF), Vail Resorts (MTN), Zumiez (ZUMZ)
Economic news:
Initial Jobless Claims – 8:30am
Trade Deficit – 8:30am
Technical Outlook and Market Thoughts
Tuesday’s pop above key resistance levels was a bullish signal for the major indexes as there was some follow thru on Wednesday. The bullish action this week has kept the uptrend channels intact and previous resistance will now try to hold as support going forward.
At current levels, the S&P is just 3% away from a fresh all-time high while the Nasdaq is 4% shy of record highs. The Dow and the Russell have lagged this year’s action and are 6% and 18% away, respectfully, from lifetime peaks. We have talked about the small-caps possibly outperforming the other major indexes if there is a summer rally given the divergence.
Of course, fresh support levels are going to need to hold into the weekend and over the near-term while higher highs continue to be established. Volatility has eased but is also facing a key test over the next few sessions that could provide ongoing clues about a possible summer rally.
The Nasdaq broke out of a 15-session trading range on Tuesday after clearing and holding 19,250. Continued closes above 19,500 and the February 24th intraday top at 19,644 keeps upside potential towards 19,750-20,000 in focus.
A move back below 19,000 and out of the bottom of the current uptrend channel would suggest another false breakout with downside action to 18,750-18,500 and the 200-day moving average.
The S&P 500 continues to ride the edge of its uptrend channel and came within 10 points of clearing 6,000 on Wednesday. A trading range between 6,000-6,100 lasted for 19 days before the S&P tagged a fresh all-time high of 6,147 on February 19th.
Support is at 5,900-5,850. A close back below the latter gets 5,800 and the 200-day moving average back on the radar.
The Russell 2000 cleared key resistance at 2,100 on Tuesday and a level that was cleared and held four times in May. However, the peak only reached 2,114 and we would like to see 2,135 cleared and held this week, or next. If so, there could be a quick surge to 2,175-2,200 and the 200-day moving average.
Key support is at 2,050 with Monday’s low at 2,043. Multiple closes back below this level and out of the uptrend channel would imply a further slide down to 2,000 and the 50-day moving average.
The Dow closed back above its 200-day moving average on Tuesday but 13 points below it on Wednesday. We are still looking for multiple closes above 42,800, specifically, that could lead to ongoing strength to 43,750-44,000 over the near-term.
Key support at 42,000 has now been holding for seven-straight sessions. A drop below this level and out of the uptrend channel could indicate a further fade towards 41,500-41,000 and the 50-day moving average.
The Volatility Index (VIX) flirted with 17.50 for the second-straight day with continued closes below this level being very bullish for the market. There was one close below 17.50 on May 16th.
Key resistance remains at 20 with stretch up to at 24-25 and the 50-day moving average.
Thursday could also be another lackluster session as Wall Street awaits Friday’s unemployment report. The numbers could help or hinder the current action and why the close will be important for next week.
We have closed seven-straight winners since late April, including a triple-digit win in TEVA, and we are 16-3 since mid-February. We have some June calls that are still struggling but we are hoping they can still get back to even, or even turn a profit before expiration. We still like all of our July Alerts although we are getting frustrated with TSLL and PBR.
Momentum Options Alerts Update for 6/5/2025
Closed Momentum Options Trades for 2025: 24-6 (80%, 9 triple-digit winners) / 2024: 77-17 (82%, 38 triple-digit winners). Please remember, all “Exit Targets” and “Stop Targets” are targets. You should not have any “Stops” entered to close any alerts or “Limit Orders” in your brokerage account unless we list one. We will send out an “Alert” or “New Alert” if we want you to close a position or if a new position comes out. Otherwise, follow instructions at all times in the updates on Monday’s and Thursday’s along with Text Alerts and videos throughout the week.
Cisco Systems (CSCO)
Option: CSCO July 67.50 calls
Expiration Date: July 18th, 2025
Entry Option Price: $0.40 (6/3/2025)
Current Option Price: $0.48
Exit Target: $0.80
Return: 20%
Stop Target: None
Action: Key resistance at $65 was challenged but held with yesterday’s peak at $$64.89. Support is at $64-$63.50.
There were numerous times in February where shares cleared $65 but could not hold this level into the close. There is breakout potential for a rally up to $67.50-$70 on continued closes above this level.
Direxion Daily TSLA Bull 2X Shares (TSLL)
Option: TSLL June 21 calls
Expiration Date: June 20th, 2025
Entry Option Price: $0.75 (5/27/2025)
Current Option Price: $0.20
Exit Target: $1.50
Return: -73%
Stop Target: None
Action: Shares traded to a low of $13.31 with prior and upper support at $13.50-$13.25 getting tripped but holding. Resistance is at $15.
The close back below the 200-day moving average last Friday was a warning signal. We mentioned a drop below $14 could force us to the sidelines. Let’s see where shares finish up by the weekend and make a final decision on Monday. The remaining premium is enough to open a new trade and why we want to possibly save it.
Bank of America (BAC)
Option: BAC July 48 calls
Expiration Date: July 18th, 2025
Entry Option Price: $0.42 (5/27/2025)
Current Option Price: $0.42
Exit Target: $0.85
Return: 0%
Stop Target: None
Action: Yesterday’s high hit $45.09 with key resistance at $45 getting topped but holding. Continued closes above this level should get $46-$47 in play with the double-top peak just below $48 from February 6th and 7th. This area was also tested last November and held. Support is at $43.50-$43. A close below $42.50 and the 200-day moving average would be a bearish development.
Rocket Companies (RKT)
Option: RKT July 15 calls
Expiration Date: July 18th, 2025
Entry Option Price: $0.50 (5/20/2025)
Current Option Price: $0.25
Exit Target: $1.00
Return: -50%
Stop Target: None
Action: Yesterday’s high tagged $13.16 with key resistance at $13.25 holding. There is gap up potential to $14.50-$15 and the 200-day moving average on continued closes above this level. Support is at $12.25-$12.
Our Price Target for RKT is $18 by mid-July. This level served as key support last October 17th and 18th. If reached, these calls will be at least $3 in-the-money. This would represent a 500% return from the profiled price of 50 cents. To reach a double, shares just need to be at $16 by July 18th.
Petrobras (PBR)
Option: PBR July 13 calls
Expiration Date: July 18th, 2025
Entry Option Price: $0.25 (5/13/2025)
Current Option Price: $0.05
Exit Target: $0.50
Return: -80%
Stop Target: If shares fall below $11, we will likely exit the Alert
Action: Key support at $11 held on the fade to $11.51. Resistance is at $11.50-$11.75 with more important hurdles at $12 and the 50-day moving average.
Our last PBR made 40% or 20 cents. This Alert is down 20 cents as the entry price was just a quarter. In January, an Alert made 2%. If shares fall below $11 ahead of Friday’s close, exit the Alert to save the remaining premium.
We are contemplating using puts if shares fall below $11 as this could easily lead to weakness down to $10-$9. The PBR July puts closed at 40 cents yesterday.
Mobileye Global (MBLY)
Option: MBLY June 19 calls
Expiration Date: June 20th, 2025
Entry Option Price: $0.50 (5/13/2025)
Current Option Price: $0.25
Exit Target: $1.00
Return: -50%
Stop Target: If shares fall below $15, we will likely exit the Alert
Action: Shares hit a high of $17.05 with lower resistance at $17-$17.25 getting tripped but holding. Support is at $16.25-$16.
We are still looking for a close above $17.25 and a move above the May 12th peak at $17.58. The May 28th peak is at $17.52. If all levels are cleared, shares could make a surge towards $19-$20. At $20, the calls will be $1 in-the-money.
Sony Group (SONY)
Option: SONY June 27 calls
Expiration Date: June 20th, 2025
Entry Option Price: $0.70 (4/29/2025)
Current Option Price: $0.50
Exit Target: $1.40
Return: -29%
Stop Target: If shares fall below $25, we will likely exit the Alert
Action: Wednesday’s high reached $26.78 with key resistance at $26.75 getting cleared but holding. A close above this level would indicate strength to $27.50-$28. Support is at $26.50-$26.25.
We would like to see shares clear $27 ahead of the weekend as the monthly June options expire in two weeks from this Friday. Our previous three call Alerts all made triple-digits are we are still hoping these do as well.