• Daily Game Plan – Mixed Action

    by  • September 25, 2013 1:48 pm • Broad Market Analysis, Bryan Sapp’s Daily Game Plan, Charts to Watch • 0 Comments

    MARKET CHECK

    Markets are chopping aimlessly today, as neither bulls nor bears have succeeded in taking control of the market over the near term.  The S&P 500 initially sold off sharply on the open, but buyers stepped in and rallied stocks back above yesterday’s close.  However, some negative news from Wal Mart (WMT) just surfaced, and that potentially has negative implications for the economy as a whole.  As a result, we’re once again pushing back near the lows of the day.  Despite weakness in other indexes, the Russell 2000 continues to hold up fairly well.  For the day, the index is higher by about 0.2% at present levels.  The Dow is today’s laggard(largely a result of WMT weakness), off by about 0.4% on the session.  Bonds are trading near breakeven, while metals are higher by about 1%.

     

    CHART OF THE DAY

    ARIAD Pharmaceuticals (ARIA) – The pharmaceutical concern has underperformed the broad market this year, trading near breakeven, but there are signs that it could be forming a tradable bottom.  The shares recently spiked to fresh 2013 highs and have since consolidated, offering a nice entry from the long side.  Short interest remains elevated at over 10% of the company’s float.  This creates the potential for short-covering rallies going forward.  ARIA is currently sitting near its 200-day moving average, which has acted as resistance numerous times over the past few months.  With the shares now sitting on this trendline, it could act as support.

    I like a long entry here with a stop on a close below $18.50.  I would initially target a move to 21, with 23 as a stretch target.

    courtesy of stockcharts.com

     

    WHAT I’M EXPECTING

    Longer term, I still believe that the bulls are in control.  For that reason, I continue to think we’ll take out the all-time highs on the S&P 500 in the near future.

    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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