• Trading 101: 3 Longs I’m Watching

    by  • July 2, 2013 8:09 am • Trading 101 with Peter Bryans • 0 Comments

    Summer trading is notorious for low volume days and choppy trading ranges. This can obviously make swing trading much more difficult. When the environment is challenging, it pays to be very selective and to keep a keen eye on specific technical levels on the S&P. Below, I have three potential long plays that I am eyeing. If the setups present themselves, these could be good candidates for a swing trade.

    Regional banks have actually shown some relative strength as of late, and you can see this via the KRE ETF—featured in the chart below. Within this industry, is the Bank of New York (BK)—a name that has yet to catch up with the rest of the regional banks but has shown some signs of life. If BK can get a move and hold above the ~29 level (site of huge put open interest, which could act as support), I like the stock’s chances to make a run at its recent 52-week high of $30.85. Global banks have been struggling, but there seems to be some potential pockets of strength in the regional space.

    (courtesy of StockCharts.com)


    (courtesy of StockCharts.com)

    CME Group (CME) has been consolidating right around the ~76.50 level for over a week now. A lot of the brokerage firms (i.e. Schwab, Ameritrade, E-Trade, etc.) have been making new 52-week highs while the market has been in corrective mode since 5/22. CME looks as if it’s on verge of breaking out of this tight range. I’d be on the lookout for a strong move up to ~$80.

    (courtesy of StockCharts.com)

    SodaStream International (SODA) is an interesting momentum play. The stock has been on a tear in 2013—posting a year-to-date gain of nearly 57 percent. As with nearly all momentum plays (i.e. Tesla Motors), the stocks are very vulnerable to some big moves—in either direction. With short interest (SI), as a percentage of the stock’s float, above 34 percent, SODA has been susceptible to short squeezes. I like this as a potential long, should the stock continue to maintain a close above the 20 day simple moving average (SMA). Momentum plays can be tricky, and timing is everything when trying to catch a volatile stock for a quick swing trade.

    (courtesy of StockCharts.com)

    Good luck trading out there.


    Peter Bryans joined the Schaeffer's Investment Research trading team as a Trader in April, 2012. A graduate of the Fisher College of Business at The Ohio State University -- where he concentrated in Finance -- Peter previously held internships with an insurance broker and a wealth-management firm. In his current role, Peter trades a variety of our real-time option services and also hosts our "Options Apprentice" weekly webinar presentations.


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