The three main domestic sectors moved higher for a fifth straight day. All four of the indices moved higher on Tuesday, but for the Russell it was only the second straight day of gains.
The Russell led the way yesterday with a gain of 0.46% while the other three had much more modest gains. The Dow was up 0.11%, the Nasdaq gained 0.10%, and the S&P eked out a gain of 0.03%.
[hana-code-insert name=’adsense-article’ /]The sectors were split right down the middle yesterday with five moving higher and five moving lower.The biggest move of all was a 0.44% move to the upside by the consumer discretionary sector.
The financial sector was up 0.39% as the second best performer.
As for the sectors that lost ground, the tech sector fell 0.23% and the consumer staples sector dropped 0.16% as the second worst performer.
My scans remained negatively skewed last night and turned a little more bearish. There were 53 names on the bearish list and 15 on the bullish side.
The barometer dropped to a reading of 26.1 once these results were added in to the equation.
With the abundance of stocks to choose from on the bearish list, today’s trade idea is a bearish one. TechnicnipFMC (NYSE: FTI) appeared on the bearish list and has poor fundamentals. The EPS rating is only 30 and the SMR rating is a D.
The stock has been trending lower since peaking above the $28 level back in July. The closing highs from the last five months connect to create a downward sloped trend line and the stock just hit it. We also see that the daily stochastic readings hit overbought territory and made a bearish crossover last night. We see the indicators made similar moves in July, September, and October.
Buy to open the January 21-strike puts on FTI at $1.35 or better. These options expire on January 17. In order for these options to double the stock will need to drop to $18.30. The stock dropped to $18.42 back in early December so it will need to break below that mark. I suggest a target gain of 100% with a stop at $20.60.
— Rick Pendergraft
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