Stocks inched higher on Tuesday and all four of the main indices experienced modest gains. The Russell gained 0.33% to lead the way and the Nasdaq tacked on 0.19%. The S&P notched a gain of 0.15% and the Dow lagged the others with a minimal gain of 0.03%.
Eight of the 10 main sectors moved higher on the day while two moved lower. The materials sector led the way with a gain of 0.62% and it was followed by the utilities sector with a gain of 0.59%.[hana-code-insert name=’adsense-article’ /]The healthcare sector turned in the worst performance with a loss of 0.24% and it was joined in negative territory by the industrial sector with a loss of 0.04%.
My scans produced more negatively skewed results on Tuesday with 45 names on the bearish list and six names on the bullish side.
The barometer dropped from -19.2 to -31.7 once these results were added in to the calculation.
The stock that stood out the most to me last night was Bed Bath & Beyond (Nasdaq: BBBY) and it was on the bearish list. The company scores a 16 on Investor’s Business Daily’s EPS rating system and it gets a C in the SMR category.
Bed Bath & Beyond gapped sharply lower back in September. The stock had used the $17 area as support on two instances just before the gap lower. Now I look for the $17 area to act as resistance now that the stock has filled the gap. You can see from the RSI and the daily stochastic readings that the stock is tremendously overbought at this time.
Buy to open the April $17-strike puts on BBBY at $1.75 or better. These options expire on April 18. The options will double if the stock drops to $13.50. The stock bottomed down under $11 back in December. I suggest a target gain of 100% with a stop at $17.30.
— Rick Pendergraft[hana-code-insert name=’MMPress’ /]