Stocks moved higher yesterday on the eve of the summit between President Trump and North Korean President Kim Jung Un. All four of the main indices gained ground, but all four gave up some of their gains in final half hour. The Russell 2000 led the way with a 0.2% gain. The Nasdaq gained 0.19%, the S&P gained 0.11%, and the Dow lagged the others with a gain of only 0.02%.
Eight of the ten main sectors moved higher on the day. The consumer staples sector led the way with a gain of 0.79% followed by the telecom sector with a gain of 0.49%.
My scans continue to produce more bearish signals than bullish signals with the numbers from last night being 58 names on the bearish list and only 12 names on the bullish list.
The barometer dropped down to -36.3 from -26.1.
The last three trade ideas have been either neutral or bearish ones, so I wanted a bullish trade idea to keep things relatively balanced in a week where I expect greater volatility.
One name that jumped out at me on the bullish list was Las Vegas Sands (NYSE: LVS). The casino and resort operator gets an EPS rating of 81 and an SMR rating of an A from IBD.
The chart shows how the stock struggled to move above the $78 level back in January, but now that same area appears to be working as support. We also see that the stochastic readings are getting ready to make a bullish crossover and that has been a good sign in the past.
Buy to open the Aug18 77.50-strike calls on LVS at $4.00 or better. These options expire on August 17. The stock will need to get to $85.50 for these options to double and that seems realistic as that is only 7.8% above the current level. Set a target of 100% for the upside with a stop loss at $77.50.
— Rick Pendergraft