All four indices moved higher yesterday, but the paths to get to positive ground weren’t all the same. The Nasdaq led the way with a gain 1.17% and it was followed by the S&P with a gain of 0.91% and both opened higher and stayed there all day.
The Dow opened lower but rallied back to post a gain of 0.68%. The Russell waffled back and forth from positive territory to negative territory several times throughout the day before finishing with a gain of 0.20%.[hana-code-insert name=’adsense-article’ /]Nine of the 10 sectors moved higher on the day with the telecom sector losing 0.43% as the only one in the red.
The industrial sector led the way with a gain of 1.43%.
Two other sectors gained more than one percent and they were the tech sector (1.21%) and the healthcare sector (1.19%).
My scans produced more bullish signals than bearish signals for a second straight day with the final count being 36 names on the bullish side of the ledger and 7 on the bearish side.
The barometer moved back in to positive territory for the first time in 11 days with a reading of 2.9, up from -19.3 on Tuesday.
One name on the bullish list that I have suggested for a trade idea before was Zoetis (NYSE: ZTS). On May 7, I suggested a bullish trade idea and that option hit its target of 100% on June 15. The pharmaceutical company gets a 95 EPS rating and an A SMR rating. The company does report on August 2, so you will want to aware of that. The earnings report makes this a little riskier trade idea.
You can see the trend channel that has formed over the past year and how the stochastic readings have dipped down in to oversold territory. When the stock has been on the lower rail and the stochastics have been in oversold territory at the same time, big rallies have occurred afterwards.
Buy to open the Sep18 $82.50-strike calls on ZTS at $5.20 or better. These options expire on September 21. For these options to double the stock will need to reach $92.90 and that is a gain of 8.5% from yesterday’s closing price. Based on the previous bounces off the lower rail, that seems like a reasonable target gain. I would suggest a stop at $83.
— Rick Pendergraft[hana-code-insert name=’MMPress 2′ /]