• Daily Game Plan – Top of the Range

    by  • June 18, 2013 1:45 pm • Broad Market Analysis, Bryan Sapp’s Daily Game Plan, Charts to Watch • 1 Comment

    MARKET CHECK

    Market momentum from yesterday has been maintained, as the S&P 500 has rallied back near the top of its recent range near 1650.  Since the swoon we saw late last week, equities are up over 2% in a few days, but have yet to take out this round-number resistance level to the upside.  Whether or not this move off the lows will continue higher will likely be decided by tomorrow’s FOMC press release and the signaling of tapering(or lack thereof) in the near future.

    Currently, stocks are trading near their highs of the day, with the Russell 2000 leading, up 1.1% on the session.  The S&P 500, Nasdaq, and Dow are all about 0.7% higher from yesterday’s closing levels.  Bonds are bid slightly higher despite today’s equity strength, up 0.3%, while metals and miners are taking a hit.  Currently, gold is off 1.2% today while miners are 2.6% lower on the session.

     

    CHART OF THE DAY

    Westport Innovations (WPRT) – The low-emission engine technologies firm has been stuck in a range as of late, but appears ready to break to the upside.  Since rallying near 32 in February, the shares have traded in the narrow 28-32 range, and currently sit perched above the 30 level, offering a nice risk/reward entry from the long side.  Short interest on WPRT is very elevated at 24% of the stock’s float, and any positive news could spark a strong move higher.

    I like a long entry here with a stop on a close below 28.50.  I would initially target a move back to 32, with 35 as a stretch target.

    courtesy of stockcharts.com

     

    WHAT I’M EXPECTING

    I’m looking for choppy conditions into tomorrow’s FOMC release, then a big move on the news.  Nothing earth shattering there, but picking a market direction ahead of this event is a 50/50 proposition.  Managing risk into this news release should be your primary goal.

    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/

    One Response to Daily Game Plan – Top of the Range

    1. Brandon Gilkey
      June 19, 2013 9:02 am at 9:02 am

      Do you have levels in the S&P’s that will signal further weakness or strength in the coming days after FOMC?

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