The indices were mixed yesterday with the Nasdaq and S&P gaining ground and the Dow lost ground. The Nasdaq led the way with a gain of 41% and the S&P gained 0.07%. The Dow lost 0.06%. Merck (-1.0%) and Walmart (-0.9%) were the biggest drags on the Dow.
The sectors were split evenly with five moving higher and five moving lower. The materials sector led the way yesterday with a gain of 0.74% while consumer discretionary and telecom (0.59%) tied for the second best performance.[hana-code-insert name=’adsense-article’ /]The worst performing sector was the utilities sector with a loss of 0.6% followed by the consumer staples sector with a loss of 0.48%.
For a second straight night, my scans were pretty balanced last night.
The final tally from last night was 20 bullish signals and 19 bearish signals.
Adding those numbers in to the total caused the barometer to drop to 12.9.
With the balanced scan results for the last few nights, I am attempting to remain balanced with the trade ideas as well.
With that in mind, I have a bullish trade idea on Archer Daniels Midland (NYSE: ADM) for today. The company doesn’t have the best fundamentals, but this trade is based more on the chart than anything. ADM gets a 52 on the EPS rating and a D on the SMR rating.
Even with all of the volatility in the market since the first of the year, ADM has managed to maintain its uptrend. That trend has been confined to a trend channel and the stock just hit the lower rail of the channel last week. The last four times the stock has been at or near the lower rail, it has rallied by at least 6% and most of the time it has bounced at least 9%.
Buy to open the Jul18 $43-strike calls on ADM at $2.00 or better. These options expire on July 20. With the price of the options and the goal of doubling your money, the stock needs to get to $47. That is only 6.3% from the current price. I suggest a target profit of 100% and a stop-loss point of $43.50.
— Rick Pendergraft[hana-code-insert name=’IAlley article’ /]