Friday saw all four of the main indices in negative territory early on as there were some concerns about the first phase of the trade agreement between the U.S. and China actually getting signed. All four would eventually rally and would end up with gains.
The Nasdaq was the top performer with a gain of 0.48% and it was followed by the Russell which tacked on 0.31%. The S&P notched a gain of 0.26% while the Dow eked out a gain of 0.02%. For the S&P it marked the fifth straight weekly gain.
[hana-code-insert name=’adsense-article’ /]Turning our attention to the sectors, six of the 10 main sectors moved higher on Friday with healthcare leading the way with a gain of 0.73%.The tech sector was the second best performer, moving up 0.56%.
The utilities sector was the worst performer once again with a loss of 0.42%.
The sector fell 3.65% on the week and it seemed like it was under pressure every day.
The energy sector dropped 0.41% on Friday and that was the second worst performance.
My scans were somewhat balanced on Friday with 17 names on the bullish list and 23 on the bearish side.
The barometer moved up to -37.6 from -50.3 once these results were added to the totals.
With the utilities sector getting hit so hard, I think the selling is overdone and today’s trade idea is a bullish one on a utility stock. Evergy (NYSE: EVRG) appeared on the bullish list Friday night and the company’s fundamental ratings are above average. The EPS rating is a 64 and the SMR rating is a B.
I felt the weekly chart showed the upward trend in Evergy’s stock better than the daily chart did. The stock has seen a trend channel form in 2019 and the stock hit the lower rail of the channel this past week. The daily stochastic readings are in oversold territory and made a bullish crossover on Friday.
Buy to open the December 60-strike calls on EVRG at $3.70 or better. These options expire on December 20. In order for these options to double the stock will need to reach $67.40. The stock reached a high of $67.81 back in September, so it won’t have to reach a new high for our target to be hit. I suggest a target gain of 100% with a stop at $61.80.
— Rick Pendergraft
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