• Daily Game Plan – Big Week Ahead

    by  • September 13, 2013 1:44 pm • Broad Market Analysis, Bryan Sapp’s Daily Game Plan, Charts to Watch • 0 Comments

    MARKET CHECK

    Markets are fairly quiet yet again today, as everyone is bracing for what should prove to be a very eventful upcoming week.  Not only is it September options expiration, there is a ton of economic data to be released and the Fed will announce its highly-anticipated September policy statement.  Additionally, many are speculating that Ben Bernanke’s successor will be announced, which could have a profound impact on policy going forward.  Today, however, is merely the calm before the proverbial storm.  Stocks are slightly higher across the board, with most indexes trading up about 0.4%.  bonds are also catching a bid, higher by 0.4%, while metals are slightly lower.

     

    CHART OF THE DAY

    Pitney Bowes (PBI) – The digital communications concern has been very strong this year, up by about 60% since January.  The shares recently broke higher on better-than-expected earnings and have since consolidated, offering a nice entry on the long side.  Despite its strength, sentiment toward the equity remains very skeptical.  Currently, over 25% of PBI’s float is sold short.  Should the shares continue higher, this creates an ongoing potential for short-covering rallies.  Additionally, only 1 of the 5 analysts covering PBI has the stock rated a “buy.”  The creates future upgrade potential, which could act as a tailwind going forward.

    I like a long entry here with a stop on a close below $16.25.  I would initially target a move to 20, with 25 as a stretch target.

    courtesy of stockcharts.com

     

    WHAT I’M EXPECTING

    Barring any big news over the weekend, markets will likely be quiet early next week, but then I’m looking for some big volatility into the weekend.  I think it’s safe to assume that most people are expecting some sort of tapering to be announced, but I wouldn’t be so sure.  Economic data has been improving, but it’s nowhere near the thresholds that have been outlined for the Fed to completely pull out of its asset purchases.  If there is tapering announced, I would expect the reaction to be smaller(and potentially buyable on a dip) than if none is scheduled.

    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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