The winning streak for the indices stretched to four days on Wednesday as all four rose once again. The Nasdaq led the way with a gain of 0.66% and it was followed by the Russell with a gain of 0.61%. The S&P moved up 0.42% and the Dow tacked on 0.15%. The Dow started out in the red and moved in to the black early on.
Today’s trade will be interesting as Black Friday is historically a good day for stocks in the abbreviated trading session, but President Trump signed the Hong Kong Act late Wednesday and that angered China. This could cause some selling in stocks as the trade negotiations could be affected.
[hana-code-insert name=’adsense-article’ /]Nine of the 10 sectors moved up on Wednesday with the industrial sector losing 0.10% as the only one in the red.The healthcare sector led all sectors with a gain of 0.86% and it was followed by the communication services sector with a move of 0.71%.
The tech sector continued to move higher with a gain of 0.56%.
The scans halted a three-day string of positive readings with a negative result on Wednesday.
There were 19 stocks on the bearish list and 10 on the bullish list.
The barometer dropped from 19 to 11 once these results were added in to the equation.
Out of the 29 names on the two lists, only one really stood out for the combination of fundamentals and chart. Concho Resources (NYSE: CXO) appeared on the bearish list and its fundamentals are mixed. The EPS rating is below average with a reading of 34 and its SMR rating is above average with a C rating.
The chart shows how Concho has been trending lower since its peak in April. There was a big gap down at the beginning of August, but if you connect the closing highs from April, May, and July, you see a downward-sloped trend line and the stock is right at that trend line now.
Buy to open the January 75-strike puts on CXO at $4.80 or better. These options expire on January 17. In order for these options to double the stock will need to drop to $65.40. The stock dropped well below that level back in October, so it won’t have to reach a new low to reach our target. I suggest a target gain of 100% with a stop at $75.25.
— Rick Pendergraft
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