NextOptions.com Index and Earnings Options Play List for 7/31/2018
Nasdaq Closes Below 50-Day MA/ Trade Alert (PGNX)
8:00am (EST)
The market showed some strength on Monday’s open but spent most of the session in negative territory as Wall Syreet prepares for the Fed. The Nasdaq was the weakest of the indexes, falling more than 1% amid calls of a potential market top for the so-called “FANG” group of tech stocks.
Support was tested and breached on the pullback as the major indexes closed near session lows. Volatility remains heightened and is showing signs of a continued market selloff if the VIX clears 15.
The Nasdaq stumbled 1.4% after testing an intraday low of 7,604. Upper support at 7,650-7,600 and the 50-day moving average failed to hold with a close below the latter being a continued bearish development.
The Russell 2000 fell 0.6% following the backtest to 1,653. It was the 2nd-straight close below the 50-day moving average with fresh support at 1,650-1,640 holding.
The S&P 500 slid 0.6% after trading to a low of 2,798. The index held key support at 2,800 and a level that has held for 10-straight sessions. A close below this level would be a bearish development.
The Dow also fell 0.6% after testing a low of 25,287. The close back below the 25,400 level was a slightly bearish development with risk to 25,000 on continued weakness.
Energy was up 0.8% to lead sector strength. Healthcare added 0.1% while Financials were flat.
Communications Services and Technology tumbled 1.6% to pace sector laggards. Industrials were down 1%.
The S&P 500 Volatility Index ($VIX) soared to a high of 14.46 intraday with fresh and upper resistance at 14-14.50 and the 200-day moving average holding. A close above 15 would likely trigger panic selling with risk to 17-17.50. Rising support is at 13.50-13 and the 50-day moving average.
The Spider S&P 500 ETF (SPY) fell for the 3rd-straight session following the intraday backtest to $279.36. Upper support is at $279.50-$279 held with a move below the latter signaling additional weakness towards the $277.50 area.
Lowered resistance is at $280-$280.50 with a close back above the latter being a slightly bullish signal for another possible push towards $282-$282.50.
The 50/200-day moving averages remain in solid uptrends and are signaling longer-term higher highs.
RSI is in a slight downtrend with near-term support at 50. A close below this level would signal additional weakness towards 45-40 and June lows. Resistance is at 55-60.
The Financial Select Sector Spiders (XLF) has been in a tight trading range over the past 5 sessions with Monday’s high reaching $28.35. Continued closes above May resistance at $28.25 would be a bullish development.
The 50-day moving average is trying to level out after falling below the 200-day moving average earlier this month. The lower lows ahead of the death-cross formed a nice bottom before the back of the month rebound.
Support is at $28-$27.75 with a close below the latter likely signaling additional weakness towards the major moving averages.
RSI is trying to clear upper January resistance at 65-70. Continued closes back above the latter would be a slightly bullish signal for continued strength. A close below support at 60 would suggest another backtest towards 55-50.
The Fed meets today and Wednesday, but no change is expected in rates. There has been no signal from policymakers that they are preparing to boost rates again after hiking in June. The policy statement, however, should be supportive of a move up in rates at the September 25th, 26th meeting.
Analysts believe the Fed will be a little more upbeat in its outlook on the economy given the 4.1% increase in growth, and can note the fact that most inflation measures have hit the goal. However, Chairman Powell has indicated he’s not ready to declare victory on inflation just yet, while others remain concerned over the potentially recessionary signals from a yield curve inversion, and cautious over the effects of tariffs.
AvalonBay Communities (AVB), Blackbaud (BLKB), Denny’s (DENN), Gladstone Commercial (GOOD), Illumina (ILMN), Knoll (KNL), NutriSystem (NTRI), Rambus (RMBS), Stifel Financial (SF), Texas Roadhouse (TXRH), Vornado Reality Trust (VNO), Woodward (WWD) reported earnings after Monday’s closing bell.
American Tower (AMT), BP (BP), Cummins (CMI), Honda Motor (HMC), Johnson Controls (JCI), Lumber Liquidators (LL), OshKosh (OSK), Procter & Gamble (PG), Ralph Lauren (RL), Sanofi (SNY), Sony (SNE), Timken (TKR), Vulcan Materials (VMC), Xylem (XYL) are announcing numbers this morning.
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Our top triple-digit winning option recommendations for 2018:
+400% Spider Dow Jones February 250 puts (February 2018)
+400% PowerShares QQQ February 162 puts (February 2018)
+300% Intel February 47 calls (January 2018)
+225% CVS June 65 calls (May 2018)
+209% Boston Scientific BSX July 31 calls (June 2018)
+191% Sony February 48 calls (January 2018)
+175% Big Lots June 40 puts (June 2018)
+168% American Airlines July 40 puts (June 2018)
+133% Progenics Pharmaceuticals May 8 calls (March 2018)
+117% Energous May 17.50 calls (April 2018)
+100% Progenics Pharmaceuticals August 8 calls (June 2018)
+100% Spider Dow Jones February 258 puts (January 2018)
+100% Marvell Technology (March 2018)
Our top triple-digit winning option recommendations for 2017:
+900% Lumber Liquidators August 27.50 calls (August 2017)
+400% Limelight Networks December 4 calls (November 2017)
+300% JDcom June 37 calls (May 2017)
+300% Kate Spade March 20 calls (March 2017)
+300% Imax May 30 puts (May 2017)
+286% Fastenal May 49 puts (April 2017)
+246% Dick’s Sporting Goods June 45 puts (May 2017)
+244% Starbucks February 57.50 puts (February 2017)
+200% GameStop April 22.50 puts (March 2017)
+173% Alibaba February 100 calls (January 2017)
+169% Amicus Therapeutics August 12 calls (July 2017)
+116% iShares Russell 2000 (November 2017)
+110% Amicus Therapeutics July 8 calls (June 2017)
+100% Cisco Systems October 32 calls (September 2017)
+100% Bank of America July 23 calls (June 2017)
+100% PowerShares QQQ ETF February 122 calls (January 2017)
+100% Array BioPharma January 8 calls (January 2017)
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Sony (SNE, $52.34, down $1.06)
SNE August 51 puts (SNE180817P00051000, $1.20, up $0.45)
Entry Price: $0.75 (7/30/2018)
Exit Target: $1.50
Return: 58%
Stop Target: None
Action: Monday’s low tapped $52.18 with upper support at $52.25-$52 holding. Resistance is at $52.75-$53.
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Starbucks (SBUX, $51.90, down $0.25)
August 50 puts (SBUX180817P00050000, $0.60, flat)
Entry Price: $0.80 (7/25/2018)
Exit Target: $1.60
Return: -25%
Stop Target: None
Action: Shares traded down to $51.76 yesterday with upper support at $51.75-$51.50 holding. Resistance is at $52.25-$52.50.
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Progenics Pharmaceuticals (PGNX, $8.31, up $0.65)
PGNX August 10 calls (PGNX180817C00010000, $0.45, flat)
Entry Price: $0.55 (7/3/2018)
Exit Target: $1.10-$1.65, raise to $4
Return: -17%
Stop Target: None
Action: Raise the Exit Targets from $1.10-$1.65 to $4 with a Limit Order on HALF the position.
Shares closed at the session high before being halted ahead of Monday’s close.
The FDA granted the approval of Azedra injection for intravenous use for the treatment of adults and adolescents age 12 and older with rare tumors of the adrenal gland. More specifically known as pheochromocytoma or paraganglioma, adrenal glands cannot be surgically removed after spreading beyond the original tumor site and require systemic anticancer therapy.
This is the first FDA-approved drug for this use, the FDA noted. As it is a radioactive therapeutic agent, Azedra includes a warning about radiation exposure to patients and family members, which should be minimized while the patient is receiving Azedra.
We’re hoping continued momentum can carry shares past $10 and towards $12-$14 on this morning’s open. If so, we should get filled on the aggressive $4 Exit Target. If not, I will likely send out a Trade Alert with further instructions.
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Upcoming Earnings
Tuesday
After the close: Akamai Technologies (AKAM), Apple (AAPL), Baidu.com (BIDU), Cheesecake Factory (CAKE), Hologic (HOLX), Lydall (LDL), NuVasive (NUVA), Pandora Media (P), Quality Systems (QSII), Red Rock Resorts (RRR), Terex (TEX), Zagg (ZAGG)
Wednesday
Before the open: AMC Entertainment (AMC), Bunge (BG), Caesars Entertainment (CZR), Dominion Energy (D), Ferrari (RACE), Garmin (GRMN), HanesBrands (HBI), Kforce (KFRC), LittelFuse (LFUS), Molson Coors Brewing (TAP), Pitney Bowes (PBI), Radware (RDWR), SodaStream (SODA), Vonage Holdings (VG)
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