Stocks started off on a positive note on Wednesday with all four of the main indices posting decent gains in the morning.
Unfortunately the optimism didn’t last and three of the four dipped in to negative territory by the end of the day.
The Nasdaq managed to move up 0.32% on the day, but it was the only one of the four in the green. The Russell posted the biggest loss at 0.21% and it was followed by the S&P which dropped 0.12%.
Where the options market says Twitter may be headed. Plus, the trade on Yum China
The Dow posted a loss of only 0.04%.The sector performance was really odd on Wednesday.
Six of the 10 main sectors fell, but the actual numbers varied greatly.
The utilities sector fell 2.18% as the worst performer.
The consumer staples sector fell 1.43% and the healthcare sector dropped 1.26% as the second and third worst performers.
Conversely, the energy sector gained 1.54% and the tech sector jumped 1.08%.
It is rare to see two sectors gain over one percent on a day where three sectors fell over one percent.
After huge bearish readings on Monday and Tuesday, my scans slowed down a little last night.
There were 19 names on the bearish list and seven names on the bullish side.
The barometer did climb from the extremely low reading on Tuesday even though the scans were still negatively skewed. The final reading was -68.1, up from -94.
After eight straight bearish trade ideas, I finally have a bullish one for you.
Twitter (NYSE: TWTR) appeared on the bullish list last night and the company has great fundamental ratings. The EPS rating is the highest a company can get at 99 and the SMR rating is an A.
We see on the daily chart how the lows from December and March connect to give us an upward sloped trend line.
The stock has dipped over the last month or so and that has brought it down to this trend line. We also see that the stochastic readings have reached oversold territory, but made a bullish crossover last night.
Buy to open the August 34-strike calls on TWTR at $3.40 or better.
These options expire on August 16. In order for these options to double the stock will need to reach $40.80. The stock peaked at $40.92 in April, so it won’t have to break that potential resistance to hit the target.
I suggest a target gain of 100% with a stop at $34.40.
— Rick Pendergraft
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Rick Pendergraft, Trades Of The Day
Rick Pendergraft has been studying, trading, analyzing and writing about the investment markets for over 30 years.
He has worked for some of the largest financial publishers in the world and he has been quoted in the Wall Street Journal, USA Today, the New York Times and the Washington Post.
In addition, he has been interviewed on Bloomberg, CNBC and Fox Business News. Rick's analysis process includes fundamental, sentiment and technical analysis. View all posts by Rick Pendergraft, Trades Of The Day →