• Daily Game Plan – Frustration

    by  • December 4, 2012 2:01 pm • Broad Market Analysis, Bryan Sapp’s Daily Game Plan, Charts to Watch • 0 Comments

    MARKET CHECK

    Another day, another choppy tape.  Today, markets opened flat, spiked higher in the first hour, drifted lower, and are now rallying again.  At present levels, all major indexes are flat for the day.  However, both bonds and the VIX have a bid  — these two instruments should be monitored closely as we move forward.  Their strength is a sign that there could be some fear creeping back in to the market, and a little more downside could be in order.

    Among the leaders today are formerly loved large-cap tech names.  Many of these stocks, including HPQ, CSCO and INTC have had a rough ride this year, and could be experiencing nothing more than an oversold bounce.  En vogue large-cap tech names, including AAPL and GOOG, are struggling.

     

    CHART OF THE DAY

    Nokia Corporation (NOK) – Similar to Research in Motion (RIMM), NOK has had a rough ride this year, down about 30% since January.  However, the shares have bounced nicely and recently perked back above the 200-day moving average(red trendline).  Since bottoming in July, short interest and the equity’s price have nearly doubled over that short time period.  Given the strong price action and continuing skepticism, further upside could be expected from here.  A quick rally to the $5 level doesn’t seem out of the realm of possibilities.

    courtesy of stockcharts.com

     

    WHAT I’M EXPECTING

    I hate to sound like a broken record, but this range of 1385-1425 continues to hold.  Trade the range, and until we break, try to find favorable stock setups and/or trade around news.  I’m still expecting a rally into the end of the year.

     

    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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