My Stock Winners

Financials (XLF)
Bullish
Sector trading above its…
20-day Moving Average: NO
50-day Moving Average: NO
100-day Moving Average: NO

Sentiment: Options traders continue to show an overwhelming preference for puts over calls toward the Select Sector SPDR Financials Fund (XLF ?35.02). The Schaeffer’s put/call open interest ratio (SOIR) for the ETF comes in at 3.92, as put open interest is nearly times call open interest among options with fewer than three months until expiration. In fact, peak put open interest in the April series rests at the 35 strike with roughly 192,000 contracts. This accumulation of bearish bets not only indicates high levels of pessimism, but the buildup could also act as a layer of options-related support.

Outlook:Technically speaking, the XLF has the combined support of heavy put option interest at the 35 strike and its rising 50-week moving average. Since the end of October, the ETF has finished only one week below this intermediate-term trendline. This combination of pessimism and growing technical strength has bullish implications from a contrarian perspective.

Sector
Utilities (UTH)
Bullish Sector trading above its…
20-day Moving Average: YES
50-day Moving Average: YES
100-day Moving Average: YES

Sentiment:Skepticism is extremely heavy in the sentiment backdrop of the utilities sector. Wall Street has placed some heavy bets against the group as less than 27 percent of the 177 analyst ranking on the components of the utilities sector come in at a “buy.” This bearish configuration leaves ample room for potential upgrades. In addition, the SOIR for the Utilities HOLDRS Trust (UTH ? 135.13) indicates that put open interest continues to outweigh call open interest among near-term options. The current reading of 1.23 is now higher than 62 percent of those taken during the past 52 weeks.

Outlook: The UTH continues to consolidate its recent gains and is moving into support at its rising 10-week and 20-week moving averages. Additional support in the form of the ETF’s rising 10-month trendline is also climbing into the region and should help to buoy the shares.