Schaeffer's Trading Floor Blog

Stocks at New Highs: The Fresh Market and Ryland Group

TFM and RYL both rallied to new annual highs today

by 1/25/2012 3:11 PM
Stocks quoted in this article:

With stocks bouncing back from early losses in afternoon trading, annual highs are easily outnumbering annual lows today. The NYSE has racked up 109 fresh 52-week peaks today, compared to only nine securities that have slipped to a new low. Over on the Nasdaq, we've got 82 annual highs outstripping just half a dozen annual lows. Among today's top technical performers are organic grocery chain The Fresh Market, Inc. (TFM - 46.29) and homebuilder The Ryland Group, Inc. (RYL - 19.08).

TFM price chartBeginning with TFM, the stock rallied to a new high of $46.92 today, extending its recent surge. The shares have already gained nearly 14% so far in 2012, compared to an approximately 5% advance for the benchmark S&P 500 Index (SPX). Today's positive momentum was inspired by a bullish brokerage note, as Cowen started coverage of TFM this morning with an "outperform" recommendation.

Scanning the stock's sentiment backdrop, TFM could be enjoying a minor short-squeeze situation today. Currently, a lofty 19.1% of the equity's float is sold short, representing more than enough sideline cash to support additional upside during the near term. In fact, at TFM's average daily trading volume, it would take more than 22 days for all of these bearish bets to be covered.

RYL price chartTurning to RYL, the shares climbed as far north as $19.41 earlier, building on their impressive year-to-date advance of 18.8%. Since early October, the builder has beaten a consistent path higher along the support of its 10-day and 20-day moving averages. RYL recently consolidated some gains atop the $18 level, but the stock's bullish momentum appears to be revving up again.

Despite the equity's steep uptrend of late, there are still plenty of bears betting against RYL. For starters, 15.2% of the stock's float is sold short. Plus, during the past couple of weeks, speculators on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 3.58 puts for every call on the stock. This ratio arrives in the 78th annual percentile, confirming a greater-than-usual appetite for bearish bets over bullish.

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