MomentumOptions.com Pre-Market for 12/19/2017
Nasdaq Clears 7,000
8:00am (EST)
The market showed continued upside momentum on prospects of a tax reform bill being passed and signed into law before the Christmas holiday. The Nasdaq traded above the 7,000 level to another record high after jumping 0.8% while the Dow moved closer to the 25,000 level after rising 0.6%.
The S&P 500 added 0.5% and came within five points of clearing the 2,700 level on its 62nd record close of the year. Meanwhile, the Russell 2000 rallied 1.2% but fell shy of setting a fresh record high by seven points just south of 1,560.
Materials and Financials were sector standouts after gaining 1.5% and 1%, respectively. Utilities were the main laggard with the sector sinking 1.1% while Consumer Discretionary slipped 0.1%.
The VelocityShares Daily Inverse VIX (ZIV) traded to another record high after peaking at 86.33 while extending its win streak to eighth-straight sessions. We mentioned a possible run towards fresh resistance up to 87-87.50 but a backtest could come first. Shaky support is at 85.50-85 with a move below 84 signaling additional weakness.
The iShares PHLX Semiconductor ETF (SOXX) recently bottomed just below the $165 level earlier this month. The low reached $164.38 and represented a nearly 10% pullback from the late November and all-time high of $181.88. A higher floor of support is trying to form at $170-$167.50 with risk to $165 on another close below the latter. Current resistance is at $174.50-$175 following today’s 2.1% pop and close above the 50-day moving average.
RSI is back in an uptrend after holding August support near the 40 level. Continued closes above 55-60 would be a bullish signal for further strength for a possible run at 70 and mid-November resistance.
The Russell 3000 Index ($RUA) traded to an all-time high of 1,594 with fresh resistance at 1,595-1,600 on continued momentum. I highlighted the volatility at the start of the month on the backtest to 1,543 and mentioned a close below 1,540 would be a bearish development but that a run to 1,590-1,600 could come, if held. Current support is at 1,580-1,575.
RSI is back in an uptrend near 75 and is approaching late November resistance. Continued closes above this level would be bullish for a possible run towards 80 and October highs.
I have made additional adjustments to our current INTC and TWTR positions to further protect profits.
Momentum Options Play List
Closed Momentum Options Trades for 2017: 54-23 (70%). All trades are dated and time stamped for verification. New subscribers can look at the past history to see how the trades have played out or to research our Track Records.
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 8am and 12pm–2pm (EST) updates. Also, I will usually give you a heads-up if I think I’m going to send a Trade Alert outside of these time frames.
Pfizer (PFE, $37.13, down $0.07)
PFE January 37 calls (PFE180119C00037000, $0.65, down $0.02)
Entry Price: $0.43 (12/14/2017)
Exit Target: $0.90
Return: 51%
Stop Target: 50 cents (Stop Limit)
Action: Monday’s low tapped $37.06. Support is at $37-$36.75. Resistance at $37.25-$37.50.
Spider Gold Shares (GLD, $119.73, up $0.55)
GLD January 117 puts (GLD180117P00117000, $0.35, down $0.12)
Entry Price: $0.95 (12/11/2017)
Exit Target: $1.90
Return: -63%
Stop Target: None
Action: Resistance is at $120-$120.50 and the 200-day moving average following yesterday’s run to $119.99. Support is at $119.25-$119.
Intel (INTC, $46.26, up $1.70)
INTC January 45 calls (INTC180119C00045000, $1.90, up $0.85)
Entry Price: $0.53 (12/11/2017)
Exit Target: $2, raise to $2.50
Return: 265%
Stop Target: 75 cents, raise to $1.60 (Stop Limit)
Action: Raise the Exit Target from $2 to $2.50. Raise the Stop Target from 75 cents to $1.60.
Fresh resistance is at $46.25-$46.50 following Monday’s surge to $46.35. Rising support is at $45.25-$45.
Bank of America (BAC, $29.48, up $0.44)
BAC January 30 calls (BAC180119C00030000, $0.57, up $0.14)
Entry Price: $0.50 (12/8/2017)
Exit Target: $1.00
Return: 14%
Stop Target: None
Action: Multi-year resistance is at $29.50-$29.75. Yesterday’s 52-week high reached $29.50. Rising support is at $29.25-$29.
Viavi Systems (VIAV, $8.85, up $0.20)
VIAV January 9 calls (VIAV180119C00009000, $0.30, up $0.05)
Entry Price: $0.65 (11/29/2017)
Exit Target: $1.30
Return: -54%
Stop Target: None
Action: Lowered resistance at $8.75-$9 was cleared on the push to $9.06 on Monday. Rising support is at $8.75-$8.50.
Twitter (TWTR, $24.68, up $2.45)
TWTR January 24 calls (TWTR180119C00024000, $1.55, up $1.10)
Entry Price: $0.70 (11/22/2017)
Exit Target: $2 (closed half @ $1 on 12/18/2017)
Return: 82%
Stop Target: 30 cents, raise to $1.20 (Stop Limit)
Action: Raise the Stop Limit from 30 cents to $1.20 on the other half of the trade.
Fresh resistance is at $24.75-$25. Rising support is at $24.25-$24.