MomentumOptions.com Mid-Market Update for 2/13/2017
Tower Semiconductor (TSEM) Reports Strong Earnings
2:35pm (EST)
Shares of Tower Semiconductor (TSEM) are up today after reporting better-than-expected earnings ahead of this morning’s open. The company reported a 4Q profit of $0.52 a share on revenue of $340 million. Wall Street was looking for a profit of $0.48 a share on revenue of $330 million.
The 34% growth in revenue was a bullish sign heading into this year although Tower failed to give specific guidance for 2017. However, the CEO said he expects each quarter to beat what the prior quarter did last year.
Shares have traded to a fresh 52-week high of $23 today and look poised to make a run towards $24-$25 on continued momentum. The chart from this morning showed continued strength and I have been on the TSEM bandwagon since mid-December. Although our current TSEM trade wasn’t an earnings play, and more or a technical trade based on the chart, I knew the company’s fundamentals were solid based on my homework.
When I take an option trade, I do both technical and fundamental analysis as I want a very bullish thesis when playing call options. If the chart looks weak, and the fundamentals of a company are crappy, I tend to use put options. I try to keep trade setups as simple as possible but it is also important to keep track of market momentum, sector rotation, sentiment, and volatility. No system is perfect and I don’t spent hundreds of dollars every month to run elaborate models or algorithms.
I watch sectors, stocks and track news. To be successful, you have to predict future events, be ahead of a pending trend, and be able to identify trading ranges. You have to love what you do and you have to love the homework and the grind. Luckily, you have me and you make my job easier as my goal is to teach you how to read the market like I do. If you read me every day, you will.
The Dow is up 152 points to 20,422 while the S&P 500 is gaining 13 points to 2,329. The Nasdaq is adding 32 points to 5,766 and the Russell 2000 is climbing 4 points to 1,393.
I have updated our current trades, including the parameters for JBL, so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2017: 9-2 (82%). 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 an Trade Alerts outside of these time frames.
Jabil Circuit (JBL, $25.36, flat)
JBL March 26 calls (JBL170317C00026000, $0.65, up $0.05)
Entry Price: $0.65 (2/13/2017)
Exit Target: $1.30
Return: 0%
Stop Target: None
Action: Set an Exit Target at $1.30. There is no Stop Target.
Fresh resistance is at $25.75-$26. Support is at $25.25-$25.
Flex (FLEX, $16.11, up $0.11)
FLEX March 16 calls (FLEX170317C00016000, $0.45, up $0.05)
Entry Price: $0.40 (2/10/2017)
Exit Target: $0.80
Return: 12%
Stop Target: None
Action: Resistance is at $16.25-$16.50. Support is at $15.75-$15.50.
Viavi Solutions (VIAV, $10.53, up $0.31)
VIAV March 10 calls (VIAV170317C00010000, $0.75, up $0.20)
Entry Price: $0.40 (2/8/2017)
Exit Target: $0.80
Return: 88%
Stop Target: 48 cents (Stop Limit)
VIAV March 9 calls (VIAV170317C00009000, $1.60, up $0.30)
Entry Price: $0.50 (1/25/2017)
Exit Target: $2.00
Return: 220%
Stop Target: $1.20 (Stop Limit)
Action: Resistance is at $10.50-$10.75. Support is at $10-$9.75.
Boston Scientific (BSX, $25.25, up $0.05)
BSX March 25 calls (BSX170317C00025000, $0.70, flat)
Entry Price: $0.70 (2/7/2017)
Exit Target: $1.40
Return: 0%
Stop Target: None
Action: Resistance is at $25.50-$25.75. Support is at $25-$24.75.
Tower Semiconductor (TSEM, $22.25, up $0.18)
TSEM March 23 calls (TSEM170317C00023000, $0.65, flat)
Entry Price: $0.45 (2/7/2017)
Exit Target: $0.90 (closed half at $0.80 on 2/13/2017)
Return: 58%
Stop Target: None
Action: Fresh resistance is at $23. Rising support is at $22-$21.75.
TherapeuticsMD (TXMD, $5.78, down $0.02)
TXMD June 7.50 calls (TXMD170616C00007500, $0.60, flat)
Entry Price: $0.75 (1/18/2017)
Exit Target: $1.50
Return: -20%
Stop Target: None
Action: Resistance is at $6. Support is at $5.75-$5.50.