Dear Momentum Options Subscriber,
A slight pullback on Thursday was almost a given following Wednesday’s short-covering rally. Although the broader market fell, the Nasdaq kissed 5,000 again and continues to show signs of a breakout to new all-time highs.
The Dow fell 117 points, or 0.7%, to finish at 17,959. The blue-chips were weak on the open and drifted to a low of 19,934 mid-day. Support at 17,900-17,800 held on the pullback, along with the 50-day moving average. Resistance is at 18,000-18,100.
The S&P 500 slipped 10 points, or 0.5%, to end at 2,089. The index also traded in negative territory throughout the session, while testing a low of 2,085. Support at 2,075 easily held, but there is risk to 2,060-2,050 on a close below the 50-day moving average. Resistance is at 2,100-2,120. I would like to see 2,085-2,075 hold on a pullback.
The Nasdaq gained 9 points, or 0.2%, to settle at 4,992. Tech was a little choppy on the open following a test to 4,979 and support at 4,975-4,950. A run to 5,000 quickly ensued before more choppiness and another backtest intraday. The bulls managed to tag 5,000 ahead of the close to keep fresh 15-year and all-time highs in play.
The Russell 2000 added 3 points, or 0.2%, to close just under 1,255. The small-caps kissed 1,248 shortly after the start of trading, with fresh support at 1,250 holding. The rebound to 1,253 fell a couple of points shy of Wednesday’s all-time high north of 1,255. A move above 1,260 could lead to a short-term run to 1,275.
The S&P 500 Volatility Index ($VIX, 14.07, up 0.10) stayed elevated throughout the session and traded to a high of 14.97. Resistance at 15 was tested by the bears, but it held and that was a bullish sign. Continued closes below 13.50 are needed to keep a sustained rally going. A close above 15 ahead of the weekend would be slightly bearish.
From desk to press, futures look like this: Dow (+131); S&P 500 (+12); Nasdaq 100 (+31).
Momentum Options Play List
Closed Momentum Options Trades for 2015: 24-6-1 (77%). 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 8:00 a.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.
Cypress Semiconductor (CY, $15.42, up $0.16)
CY April 16 calls (CY150417C00016000, $0.50, up $0.05)
Entry Price: $0.40 (3/18/2015)
Exit Target: $0.80
Return: 25%
Stop Target: None
CY June 16 calls (CY150619C00016000, $0.90, up $0.05)
Entry Price: $0.75 (3/18/2015)
Exit Target: $1.50
Return: 20%
Stop Target: None
Action: Support at $15 and the 50-day moving average was tested on Thursday’s dip to $15.07. The rebound to $15.45 fell short of resistance at $15.50-$15.75 but looked bullish.
Veeva Systems (VEEV, $27.93, up $0.45)
VEEV April 29 calls (VEEV150417C00029000, $0.80, up $0.15)
Entry Price: $0.60 (3/18/2015)
Exit Target: $1.20
Return: 33%
Stop Target: None
Action: Shares traded to a high of $28.05 on Thursday following an intraday dip to $27.27.
A move above $28.50 and the 50- and 100-day moving averages could lead to additional short covering and a run past $30. Support is at $27 and the 200-day moving average. There is additional risk to $26-$25 on a close below this level.
Gogo (GOGO, $21.08, down $0.06)
GOGO April 23 calls (GOGO150417C00023000, $0.45, down $0.15)
Entry Price: $0.55 (3/17/2015)
Exit Target: $1.10
Return: -18%
Stop Target: None
Action: Shares traded to a high of $21.52 on Thursday. Resistance is at $22. Support is at $21-$20.
Yahoo! (YHOO, $44.98, up $0.31)
YHOO April 47 calls (YHOO150417C00047000, $0.65, up $0.10)
Entry Price: $0.80 (2/26/2015)
Exit Target: $1.60
Return: -19%
Stop Target: None
Action: Closes above $45 should lead to a run at $47-$48. Yesterday’s peak reached $45.45. Near-term support is at $44-$43.
Western Union (WU, $19.25, down $0.10)
WU April 20 calls (WU150417C00020000, $0.20, down $0.05)
Entry Price: $0.36 (2/25/2015)
Exit Target: $0.75
Return: -44%
Stop Target: None
Action: Support is at $19.25-$19, with risk to $18.75 on a close below the latter. Resistance is at $19.50.
American Express (AXP, $81.54, down $0.32)
AXP April 87.50 calls (AXP150417C00087500, $0.25, down $0.05)
Entry Price: $0.56 (2/25/2015)
Exit Target: $1.15
Return: -55%
Stop Target: None
Action: Resistance is at $83-$84 and the 50-day moving average. Support is at $80.
Flextronics (FLEX, $12.12, up $0.04)
FLEX April 12 calls (FLEX150417C00012000, $0.40, flat)
Entry Price: $0.67 (2/24/2015)
Exit Target: $1.35
Return: -40%
Stop Target: None
Action: Short-term resistance is at $12.25-$12.50. The 52-week high is at $12.48. Support is at $11.75-$11.50 and the 50-day moving average if $12 fails to hold.
Marvell Technology (MRVL, $15.80, down $0.03)
MRVL May 18 calls (MRVL150515C00018000, $0.25, down $0.05)
Entry Price: $0.50 (2/18/2015)
Exit Target: $1.00
Return: -50%
Stop Target: None
Action: Shares reached a peak of $16 on Thursday. Resistance is at $15.75-$16. Support is at $15.50-$15.
BlackBerry (BBRY, $9.70, down $0.07)
BBRY June 13 calls (BBRY150617C00013000, $0.25, flat)
Entry Price: $0.60 (3/2/2015)
Exit Target: $1.20+
Return: -58%
Stop Target: None
Action: Resistance is at $10 and the 200-day moving average. Support is at $9.75-$9.50. This is a speculation play that BBRY will get a takeover offer by mid-June.
Trade on!
Rick Rouse
Editor and Chief Options Strategist
Momentum Options