Stocks were mixed on Monday as the bombings in Saudi Arabia took a toll on certain sectors and boosted other sectors. Oil jumped almost 13% on the day and that hurt three of the main indices. The Russell gained 0.41% and was the lone winner on the day.
The Dow took the worst hit with a loss of 0.52% and it was followed by the S&P which dropped 0.31%. The Nasdaq kept its loss to 0.28% and that was after it rallied off of its morning lows.
[hana-code-insert name=’adsense-article’ /]Eight of the 10 main sectors fell on Monday.As you may have guessed, the energy sector moved sharply higher with the huge rally in oil.
The sector ended up gaining 3.36% on the day.
The utilities sector gained 0.06% and was the only other sector to gain ground.
The materials sector was the worst performer with a drop of 1.61% and it was followed by the consumer discretionary sector which lost 1.28%.
Those were the only two sectors that lost more than 1.0%.
My scans produced another negative reading on Monday and that puts the streak of negative results at 11. There were 59 names on the bearish list and 19 on the bullish side.
The barometer inched up a little despite the negative skew. The final reading was -67.6 after a reading of -78.2 on Friday.
Even though the bulk of the stocks were on the bearish list, the one name that got my attention more than any other was on the bullish list. Fiserv (Nasdaq: FISV) has strong fundamental readings with an 88 on the EPS rating scale and an A on the SMR rating system.
Fiserv has been trending higher since January, but pulled back a little in recent weeks. The stock appears to have found support at its 50-day moving average over the last few days. The daily stochastic readings dropped to their lowest level since April and made a bullish crossover yesterday. Bullish crossovers in June, April, and December were all pretty good buying signals.
Buy to open the December 100-strike calls on FISV at $7.70 or better. These options expire on December 20. In order for these options to double the stock will need to reach $115.40. The stock will need to reach a new high to hit the target, but based on the previous moves after a bullish crossover in the stochastics I think it can get there. I suggest a target gain of 100% with a stop at $99.50.
— Rick Pendergraft
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