• Daily Game Plan – Still No Resolution

    by  • October 7, 2013 1:49 pm • Broad Market Analysis, Bryan Sapp’s Daily Game Plan, Charts to Watch • 0 Comments

    MARKET CHECK

    Markets are lower today, after the weekend failed to produce anything positive on the U.S. debt-ceiling front.  Both Republicans and Democrats continue to hold their ground, and markets are taking this negatively today.  Stocks gapped sharply lower, bounced mid-morning, but are now beginning to fade back toward the lows of the day.  Today’s laggard is the Russell 2000, which is off by about 0.9%.  All other major indexes are off by about 0.6% for the day.  Stocks are lower, but other assets are seeing a bid — bonds are up by about a half percent for the day, while gold and silver are significantly higher.  Silver is up nearly 3% from Friday’s close, while gold is higher by a little over one percent for the day.

     

    CHART OF THE DAY

    Intermune (ITMN) – Shares of the biotech concern have been very strong this year, higher by about 55% since January.  ITMN recently saw a massive spike on its earnings report and a favorable drug review, and the shares have since consolidated sideways.  This working off the overbought conditions can now pave the way for another leg higher.  Despite its recent strength, sentiment toward ITMN remains skeptical.  In fact, over 16% of the stock’s float is sold short.  This creates the potential for future short-covering rallies, which often times can be very swift in stocks within the biotech space.

    I like a long entry here with a stop placed on a close below 14.  I would initially target a move back to 16, with 20 as a stretch target.

    courtesy of stockcharts.com

     

    WHAT I’M EXPECTING

    I would look for a continued period of volatile chop until we can get some sort of “new” news out of Washington.  Markets remain in balance and are need of a catlayst in either direction.

    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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