After some positive earnings reports and additional positive comments regarding the trade negotiations, stocks moved higher as a whole. All four of the main indices had sizable gains, but it was the Nasdaq that led the way with a gain of 0.70%.
The Dow moved up 0.57% as the second best performed and the Russell was right behind it with a gain of 0.55%. The S&P lagged the others a little but still tacked on 0.41%.
[hana-code-insert name=’adsense-article’ /]The sectors were more mixed than I would have guessed with six moving higher and four moving lower.The tech sector was the top performer with a gain of 1.21% and the materials sector moved up 1.09% as the second best.
These were the only two that gained over 1.0%.
The utilities sector suffered the worst loss at 1.02% and the consumer staples sector fell 0.59%.
It was definitely a risk on kind of day on Friday.
My scans produced a negative result for the ninth straight night with 35 names on the bearish list and 11 on the bullish list.
The barometer inched up slightly once these results were added in, moving from -34.6 to -30.6.
With so many bearish signals over the last week plus, it has been hard to find any bullish trade ideas and that is why six of the last eight have been bearish ideas. That being said, I have a bullish one for you today and it is on Zoetis (NYSE: ZTS). The maker of pharmaceuticals for animals scores a 94 on the EPS rating system and it gets an A on the SMR grading scale.
The chart shows how the stock has been trending higher for the last nine months with a trend channel forming to define the various cycles within the overall trend. The stock just hit the lower rail of the channel during the past week and the stock turned higher. The daily stochastic readings were in oversold territory, but they made a bullish crossover on Friday and that looks like a promising development based on past instances.
Buy to open the December Week One 124-strike calls on ZTS at $4.50 or better. These options expire on December 6. In order for these options to double the stock will need to reach $133.00. That price is above the all-time high that was hit in September, but it still seems reachable. The company will announce earnings on November 7, so you will want to be aware of that report. I suggest a target gain of 100% with a stop at $122.00.
— Rick Pendergraft
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