Stocks got hit with some selling pressure on Thursday and all four indices moved down as a result. The Russell took the biggest hit at -1.13% and it was followed closely by the Nasdaq with a loss of -1.0%. The S&P dropped 0.52% and the Dow suffered the smallest loss at 0.47%.
On the sector side, nine of the 10 moved lower on the day. The only one that managed a gain was the consumer staples sector and that was only a 0.10% gain.
[hana-code-insert name=’adsense-article’ /]The energy sector was the worst performer with a loss of 1.18%.The tech sector fell 0.74% and it was followed closely by the materials sector which dropped 0.72%.
The scans snapped their streak of four straight days of positive readings last night with 30 names on the bearish list and 23 on the bullish side.
The barometer fell from 29 down to 17.2 once these results were added in to the equation.
The streak of positive readings from the scans isn’t the only streak coming to an end, my streak of bullish trade ideas is also coming to an end.
Nucor (NYSE: NUE) appeared on the bearish list and the fundamental ratings aren’t terrible with an EPS rating of 79 and an SMR of a B. However, the company saw earnings decline by 39% compared to Q2 2018 and sales declined by 9%.
Nucor has been trending lower over the past year and there is a trend line that connects the highs from last July, February, and April. The stock is just below that trend line at this time. The trend line is in close proximity to the 52-week moving average and that makes a second layer of resistance the stock faces.
Buy to open the September 57.50-strike puts on NUE at $2.75 or better. These options expire on September 20.In order for these options to double the stock will need to drop to $52.00 and that is well above the most recent low. I suggest a target gain of 100% with a stop at $58.00.
— Rick Pendergraft
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