After solid gains on Friday and Monday, stocks stalled a little on Tuesday. Three of the four indices moved higher, but all of them closed well off their highs. The Russell led the way with a gain of 0.14% and it was followed by the Dow with a gain of 0.11%. The Nasdaq eked out a gain of 0.02% and the S&P dropped 0.12%.
Seven of the 10 sectors moved higher on the day with the biggest gain coming from the financial sector at 0.41%. The energy sector continued to move up and tacked on another 0.36% on Tuesday.
[hana-code-insert name=’adsense-article’ /]For a third straight day it was the utilities sector that took the biggest loss and this time it was 1.03%.The healthcare sector fell 0.89% as the second worst performer while the tech sector declined 0.14% as the other sector in the red.
The scans were negative again last night, but the difference between the two lists narrowed considerably.
There were 13 names on the bearish list and 10 on the bullish list.
The barometer continued to climb with the small difference between the two lists.
The final reading came in at -8.7 after a reading of -17.6 on Monday.
After going through all of the charts and the fundamental stats, Sea Limited (NYSE: SE) stood out the most. The stock was on the bearish list and the fundamental ratings are poor. The EPS rating is at 22 and the SMR rating is a D.
The daily chart shows how the stock has been moving lower and a trend channel has formed that defines the different cycles within the overall downward trend. The stock hit the upper rail and turned lower yesterday. The decline caused the daily stochastic readings to make a bearish crossover and the 10-day RSI fell after flirting with the 70 mark.
Buy to open the December 32-strike puts on SE at $3.30 or better. These options expire on December 20. In order for these options to double the stock will need to drop to $25.40. The lower rail is down by the $25.40 area already so a return trip to the trend line will get us to our target. I suggest a target gain of 100% with a stop at $32.00.
— Rick Pendergraft
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