by Bernie Schaeffer, editor Schaeffer's Investment Research
Our proprietary investment strategy -- known as Expectational Analysis
-- combines three factors: technicals, fundamentals and contrarian-based
sentiment indicators.
Based on this approach, I have taken two new positions in our Master Trading Portfolio -- a long position in
Linkedin Corp. (
LNKD) and a short position in
OpenTable (
OPEN).
On the long side, Linkedin has shown strong price action year-to-date
and is up 62 percent. Over the past 6 months, LNKD is up 47 percent.
On
the sentiment front, the Schaeffer's open interest put/call ratio
(SOIR), which looks at the front three months' open interest, is
currently at 1.18. An unwinding of these options could act as a tailwind
toward LNKD.
Additionally, short interest as a percentage of the stock?s float is at
nearly 8 percent. Any strength by LNKD could cause an unwinding of these
bearish bets and drive the shares even higher.
Finally, of the
analysts covering the stock, 11 of the 20 analysts have it rated as a
hold, leaving room for further upgrades that could then drive the shares
even higher.
On the short side, price action for OpenTable has been weak, with the equity down 50 percent over the past year.
On
the sentiment front, the Schaeffer's open interest put/call ratio
(SOIR), which looks at the front three months' open interest, is
currently at 0.70.
This ratio also ranks in the 28th percentile
of all ratios in the past 52 weeks and indicates a relatively high
number of bullish bets on the equity. An unwinding of these options
could act as a headwind toward LNKD.
Downgrades are a definite
possibility in the future, as several analysts currently have it rated
as a buy or a strong buy. This could help to drive the shares down even
further.