Dear Momentum Options Subscriber,
One of the first things the bulls need to do this week is get a Monday win. That goal is still up in the air, as trading has been choppy throughout today’s session.
Analysts have taken a whack at a few tech stocks by issuing downgrades on Amazon.com (AMZN, $376.51, down $3.58) and BlackBerry (BBRY, $9.86, down $0.81), but Apple (AAPL, $127.89, up $1.29) is showing strength as its Apple Watch event is now underway.
I want to catch up on Apple’s latest product announcements, so today’s update is mainly focused on the current trades. I covered a lot this morning, and all we are waiting for are the next waves of support or resistance to trigger.
I also mentioned that a possible trading range could be developing as well, so stay patient.
Heading into the second half of trading, the Dow is up 124 points to 17,981, while the S&P 500 is higher by 7 points to 2,078. The Nasdaq is climbing 5 points to 4,932, and the Russell 2000 is advancing 3 points to 1,220.
I could have additional trade updates into the close, so stay locked and loaded.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 20-4-1 (80%). 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 1:25 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.
Atmel (ATML, $8.87, up $0.08)
ATML May 9 calls (ATML150515C00009000, $0.60, flat)
Entry Price: $0.40 (3/4/2015)
Exit Target: $1.00 (closed 1/3 at $0.65 on 3/5/2015)
Return: 56%
Stop Target: $0.50 (Stop Limit)
Action: Support is at $8.40-$8.30 and the 50- and 100-day moving averages on a close below $8.75. Resistance is at $9. If cleared, a run to $10 could come quickly.
BlackBerry (BBRY, $9.86, down $0.81)
BBRY June 13 calls (BBRY150619C00013000, $0.30, down $0.20)
Entry Price: $0.60 (3/2/2015)
Exit Target: $1.20
Return: -50%
Stop Target: None
Action: Goldman Sachs (GS) downgraded the stock to “Sell” from “Neutral” after questioning the company’s turnaround plan. The firm lowered its Price Target from $10 to $9.
Support has failed at the 50-day, 100-day and 200-day moving averages on the drop below $10. I still like this trade as a takeover play, but today’s pullback has forced me to place this trade on “hold,” and it will appear in the “Trades on Hold” section of subsequent updates. I expected short-term volatility, and there is plenty of time to ride this one out. Perhaps Samsung will come back to the table following today’s 8% drop.
Yahoo! (YHOO, $42.91, down $0.53)
YHOO April 47 calls (YHOO150417C00047000, $0.40, down $0.10)
Entry Price: $0.80 (2/26/2015)
Exit Target: $1.60
Return: -50%
Stop Target: None
Action: Support is at $43-$42 and the 200-day moving average. A close below the latter could get $40 in play. Resistance at $43.50-$45.
Western Union (WU, $19.56, up $0.11)
WU April 20 calls (WU150417C00020000, $0.30, flat)
Entry Price: $0.36 (2/25/2015)
Exit Target: $0.75
Return: -17%
Stop Target: None
Action: Resistance is at $19.50-$19.75 over the near term. Support is at $19.25-$19 if $19.50 fails to hold into the close.
American Express (AXP, $80.47, up $0.16)
AXP April 87.50 calls (AXP150417C00087500, $0.20, flat)
Entry Price: $0.56 (2/25/2015)
Exit Target: $1.15
Return: -64%
Stop Target: None
Action: Support is at $80, and a close below this level could lead to $78. Resistance is at $81.50-$82.
Flextronics (FLEX, $11.69, down $0.07)
FLEX April 12 calls (FLEX150417C00012000, $0.30, flat)
Entry Price: $0.67 (2/24/2015)
Exit Target: $1.35
Return: -55%
Stop Target: None
Action: Support is at $11.75, followed by $11.50 and the 50-day moving average. A move below this level would be bearish. Resistance is at $12.
Marvell Technology (MRVL, $16.57, up $0.01)
MRVL May 18 calls (MRVL150515C00018000, $0.45, flat)
Entry Price: $0.50 (2/18/2015)
Exit Target: $1.00
Return: -10%
Stop Target: None
Action: Resistance is at $16.75-$17. Near-term support is at $16.25-$16 on a backtest. A close below the latter could lead to $15.75 and the 50-day moving average. I believe a run to $20 is coming by mid-May once $17 is cleared.
JDS Uniphase (JDSU, $13.95, up $0.06)
JDSU March 14 calls (JDSU150320C00014000, $0.30, flat)
Entry Price: $0.78 (1/8/2015)
Exit Target: $1.00
Return: -62%
Stop Target: None
Action: Resistance is at $14-$14.25, and a close above the latter could lead to a run at the 52-week high at $14.99. Support is at $13.50-$13.25 and the 100-day moving average on a drop back below $13.75.
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.
Philip Morris (PM) March 75 puts (From January 2015) — Keep the Limit Order to sell to close the position at $0.95 in place — Continue to hold.
Trade on!
Rick Rouse
Editor and Chief Options Strategist
Momentum Options