• Daily Game Plan – Banks Lead Markets Higher

    by  • February 19, 2013 2:32 pm • Broad Market Analysis, Bryan Sapp’s Daily Game Plan, Charts to Watch • 0 Comments

    MARKET CHECK

    Markets are higher yet again, as strength in financials continue to pull markets upward.  After a small gap up from the weekend, there was buying right off the open, and indexes are currently sitting near their highs of the day.  Banks have been on quite the run recently, with the XLF up over 9 percent year-to-date and 21 percent over the pat 52 weeks.  Their strength has continued today, as the XLF is up nearly 1% from Friday’s closing levels.  Presently, the S&P 500 and Russell 2000 are both up about 0.6% for the day, while the Nasdaq slightly lags, up 0.4%.  Bonds just now turned negative on the session, down 0.2%.  As has been the case for a few weeks now, metals are again lower, as silver is off 1% on the day and gold is lower by 0.2%.

     

    CHART OF THE DAY

    Yelp (YELP) – Since its IPO last March, shares of the urban city guide have traded in a pretty volatile range, but there are signs that the stock is stabilizing here and looking to breakout.  Last week, YELP retook its 200-day moving average(blue trendline below) and is in a tight base.  A break above last week’s highs could bring in fresh buyers and drive the stock higher in a hurry.

    Despite its 30+% rally off the November lows, short interest on YELP continues to march higher.  Presently at an all-time high and representing almost 21% of the equity’s float, the glut of open bearish positions could spark sharp rallies going forward.  Lastly, YELP is a rumored attractive acquisition target for many of the bigger technology names.  Rumors of looming takeovers could put upward pressure on the name going forward.  I like an entry here with initial targets of the 24 level, and a stretch target of 28.  Should YELP close below the 20-day moving average(currently 21.20), that would be a signal to exit the position.

    courtesy of stockcharts.com

     

    WHAT I’M EXPECTING

    A continued grind higher toward 1550 on the S&P 500.  Although indexes aren’t seeing big intraday moves, you can still find beta in select names.  Tomorrow and Thursday should prove eventful, however, as a slew of economic data will be released.  New levels of interest are 1550, 1525, 1514, and 1500.

    About

    Bryan Sapp is a Senior Trading Analyst at Schaeffer’s Investment Research, where he has specialized in volatility-based options trading since early 2010. With Bryan at the helm, Schaeffer’s Volatility Trader generated a 2012 portfolio return of 70% for subscribers. This real-time option recommendation service exclusively trades short-term straddles. Prior to joining the research team at Schaeffer’s, Bryan honed his skills as a speculator by trading his own account, and playing poker professionally to pay his way through college. Bryan attended the University of Louisville, where he received his Bachelors in Economics and an MBA with an Entrepreneurship focus.

    http://www.schaeffersresearch.com/

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