Seasonal Stock Setup: Consumer Financial Services Stock Ready to Launch
Synchrony Financial (SYF) – The financial sector is seeing some bullish rotation on the back of higher yields and into its strong end of Q4 seasonality this points to further upside. Synchrony is a strong bank and financial services company that has been public for just 7 years but in those years it’s been up in all 7 years in November and December. Average return for November being +12% and in December a solid +1.3% showing continuation. Its sector the Financial XLF has been up 8 of the last 10 December’s as well. The move in interest rates could be just getting started which could be a reason to own banks into early 2022 as growth tech names struggle more. Many bank stocks look attractive overall but SYF is still coiling up in a tight weekly flag and has yet to make its traditional November move so a breakout above 50 may be the trigger for upside into year end. SYF is sitting right on top of its YTD VPOC at 48.50 and is up 43% on the year thus far although it has spent the last 6 months nearly just consolidating the early year move. New highs likely target 55 in the near term. Options activity has been mostly bullish on SYF since this summer and popular with opening put sales in January 2022 and 2023. On 10/29 long term puts were sold to open in the January 2023 $45 strike for $764k and on 11/4 a buyer of Jan 2023 $55 calls for $319k.