The indices snapped their winning streaks on Tuesday as all four moved lower on the day. All four started off in positive territory, but moved in to negative territory around midday. None of the losses were huge, but they were losses never the less.
The Russell suffered the worst loss at 0.29%. The Dow dropped 0.05%, the S&P fell 0.03%, and the Nasdaq only declined by 0.01%.
[hana-code-insert name=’adsense-article’ /]The sectors were split on Tuesday with four moving higher, four moving lower, and two were unchanged.The tech sector and the financial sector were the unchanged ones.
The communication services sector gained 0.38% as the leader on the day and it was followed by the consumer discretionary sector which moved up 0.36%.
The industrial sector saw the biggest decline at 0.87% and it was followed by the utilities sector with a loss of 0.62%.
My scans produced a third straight negative result last night with 51 names on the bearish list and eight on the bullish side.
The barometer continued to move down with these results, falling from -30.5 to -41.2.
International Paper (NYSE: IP) appeared on the bearish list last night and it is the subject of today’s trade idea. The fundamentals aren’t that bad with an EPS rating of 83 and an SMR rating of a B. However, the chart shows a bearish pattern and the Tickeron Trend Prediction Engine generated a bearish signal for the stock on Monday. The signal showed a confidence level of 75%.
International Paper has been trending lower for the last few months with the highs from April and May creating an upper rail to a trend channel. The lower rail connects the lows from March and May. The stock just hit the upper rail and the stochastic readings were in overbought territory. The indicators turned lower yesterday and made a bearish crossover.
Buy to open the July 45-strike puts on IP at $2.05 or better. These options expire on July 19. In order for these options to double the stock will need to drop to $40.90. The low in May was $40.87, so we need it to retest that low. I suggest a target gain of 100% with a stop at $45.00.
— Rick Pendergraft
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