by Bernie Schaeffer, editor Schaeffer's Investment Research
Our stock picks are based on a strategy known as "expectational
analysis" which combines fundamental, technical and contrarian-based
Based on this approach, I initiated a long position in two technology sector stocks: semiconductor equipment maker Lam Research (LRCX) and Infosys Ltd. (INFY), which is involved in systems integration, enterprise solutions and outsourcing services.
LRCX has been an outperformer lately, and is up 10 percent so far in
2013. Additionally, the shares are up 18 percent in the past 3 months.
interest, as a percentage of the stock's float, is currently at 4.50
percent. Should the equity continue to climb, we could see a
remains prevalent toward the equity, as the Schaeffer's put to call
open interest, which measures open interest on the front three months of
an optionable equity, currently stands at 1.51.
This also ranks
in the 91st percentile of all ratios in the past 52-weeks. An unwinding
of these bearish bets could act as a tailwind toward the equity.
action for INFY has been strong so far over the past year as the shares
are up over 20 percent. INFY gapped up on better-than-expected earnings
and is trading around the $50 level. This round number level could act
as short-term support for the equity.
Short interest, as a
percentage of the stock's float, is nearly 6 percent. This number has
increased over the past 2 weeks, and could lead to a short-covering
Analysts remain skeptical toward the equity, as there are
currently 2 buys, 12 holds, and 2 sell ratings. Any upgrades in the
future could help to drive the shares higher.
Finally, the mean
price target from analysts is around $42. After gapping up higher on a
strong earnings report, we could see revisions in the future, which
could also act as a tailwind toward the equity.