Bulls Get 2nd-Straight Monday Win

NextOptions.com Index and Earnings Options Play List for 3/19/2019

Bulls Get 2nd-Straight Monday Win

8:00am (EST)

The market closed higher for the 2nd-straight Monday as the major indexes continue to work their way back towards all-time highs. The small-caps are still in correction territory but the overall market is only 4%-5% away from late September and early October peaks.

Economic news was light and ahead of Tuesday’s start of the FOMC meeting with an update from Fed Chair Jerome Powell on Wednesday. Volatility was slightly higher but held key levels of resistance as Wall Street doesn’t expect much of a surprise in the meeting minutes.

The Russell 2000 rallied 0.7% following the morning run to 1,569. Fresh and lower resistance at 1,570-1,585 held with a move above the latter and the 200-day moving average being a continuing bullish signal.

The Nasdaq rose 0.3% after trading to another 2019 high of 7,737. The close above the 7,700 level was the first since early October and keeps fresh resistance at 7,750-7,800 in focus.

The S&P 500 gained 0.4% following the 4th-straight close above the 2,800 level and push to 2,835. Lower resistance at 2,825-2,850 was cleared and held on the fresh yearly peak.

The Dow nudged up 0.3% following the intraday run to 25,924. Lower resistance at 26,000-26,250 held for the 2nd-straight session with continued closes above the latter being a more bullish development.

Energy was the strongest sector after jumping 1.4%. Financials, Consumer Discretionary and Industrials were up 1%.

Communication Services and Real Estate led sector laggards after falling 0.9% and 0.5%, respectively.

The S&P 500 Volatility Index ($VIX) stayed slightly elevated throughout the session after tapping an intraday high of 13.80. Fresh resistance at 13.50-14was split but held with a move above 14.50-15 being a slightly bearish signal.

Near-term support is at 13-12.50 with a close below the latter being a bullish signal for higher market highs.

The Invesco QQQ Trust (QQQ) was up for the 5th time in 6 sessions after tapping a 2019 high of $178.99. Early and lower October resistance at $179-$179.50 was challenged but held. A close above the $180 level could lead to a run towards $182.50-$185, depending on momentum.

Rising support is at $177.50-$177 following last week’s breakout above the $175 level. The 50-day moving average remains on track to clear the 200-day moving average on higher highs. This would form a golden cross, if completed, and is typically a bullish technical signal.

RSI has cleared prior resistance from earlier this month at 70. Continued closes above this level would signal additional momentum towards 75-80 and January 2018 highs. Support is at 65-60 with a move below the latter signaling a possible near-term top for the QQQ’s.

The Spiders S&P Homebuilders ETF (XHB) snapped a 3-session slide after testing an intraday high of $38.25. Prior and lower resistance at $38.25-$38.50 was triggered but held. Continued closes above $39 would be a more bullish development with upside potential towards $40-$40.50 over the near-term.

Support is at $38-$37.75. A move below the latter would be a slightly bearish signal with additional weakness towards $37.25-$37 and the 50/ 200-day moving averages that are also in the process of forming a golden cross.

RSI is in a slight uptrend with resistance at 60. A move above this level would be a bullish signal for additional strength. Support is at 50. A move back below this level would signal additional weakness towards 45-40 with the latter representing the early January low.

Amyris (AMRS), Cherry Hill Mortgage Investments (CHMI), Del TacoRestaurants (TACO), HealthEquity (HQY), StoneCo (STNE), Tilray (TLRY). Uniti Group (UNIT) announced earnings after Monday’s close.

Bitauto Holdings (BITA), DSW (DSW), Elbit Systems (ESLT), HD Supply Holdings (HDS), Michaels Companies (MIK), X Financial (XYF) are reporting numbers this morning.

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+177% Advanced Micro Devices AMD February 23 calls (February 2019)

+155% Twitter TWTR January 31 calls (January 2019)

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+414% Boston Scientific BSX September 36 calls (September 2018)

+400% Spider Dow Jones February 250 puts (February 2018)

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+100% PowerShares QQQ November 167.50 puts (October 2018)

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+100% Progenics Pharmaceuticals August 8 calls (June 2018)

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Viavi Solutions (VIAV, $12.15, down $0.08)

VIAV June 13 calls (VIAV190621C00013000, $0.55, down $0.05)

Entry Price: $0.65 (3/12/2019)

Exit Target: $1.30

Return: -17%

Stop Target: None

Action: Support at $12.10-$12 held on Monday’s backtest to $12.12. Lowered resistance is at $12.25-$12.35.

Boston Scientific (BSX, $37.97, down $2.24)

BSX April 45 calls (BSX190418C00045000, $0.10, down $0.10)

Entry Price: $0.35 (3/4/2019)

Exit Target: $0.70

Return: -64%

Stop Target: None

Action: Close the trade this morning to save the remaining premium. These were “cheap” options but yesterday’s 5.6% drop and backtest to $37.69 was a near-term bearish development.

AT&T (T, $30.80, up $0.13)

April 31 calls (T190418C00031000, $0.35, up $0.05)

Entry Price: $0.65 (3/1/2019)

Exit Target: $1.30

Return: -46%

Stop Target: None

Action: Shares tested a high of $30.84 with fresh and lower resistance at $30.75-$31 and the 200-day moving average getting cleared and holding. Support is at $30.50-$30.25 and the 50-day moving average

Bank of America (BAC, $29.82, up $0.52)

BAC April 30 calls (BAC190418C00030000, $0.65, up $0.25)

Entry Price: $0.75 (2/21/2019)

Exit Target: $1.50

Return: -13%

Stop Target: None

Action: Shares traded to a high of $29.96 with fresh and lower resistance at $30-$30.25 holding. Rising support is at $29.75-$29.50.

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Upcoming Earnings

Tuesday 

After the close: Atento (ATTO), FedEx (FDX), Interpace Diagnostics (IDXG), Ramaco Resources (METC), Smartsheet (SMAR), Steelcase (SCS), Tencent Music Entertainment (TME), Westport Fuel Systems (WPRT), Zuora (ZUO)

Wednesday

Before the open: Bio-Path Holdings (BPTH), General Mills (GIS), Medical Tranion Billing (MTBC), Pintec Technology (PT), Rada Electronic Industries (RADA)

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