Stocks couldn’t get much momentum in either direction on Wednesday and the indices ended up with split results. The Russell led the way for a second straight day, gaining 0.25%. The Nasdaq moved up 0.05% as the other index in positive territory.
The Dow dropped 0.10% and was the worst performer of the bunch while the S&P fell 0.04% as the second index to lose ground.
[hana-code-insert name=’adsense-article’ /]The sectors were split down the middle for a second straight day.The biggest move came from the communication services sector and it was a 0.68% move to the upside.
The utilities sector tacked on 0.40% and it was the second best performer.
Two sectors tied for the worst performance with the financial sector and industrial sector both dropping 0.42%.
The scans were bearish for a fourth straight night on Wednesday.
There were 28 names on the bearish list and seven on the bullish list.
The barometer changed as little as it possible can when these results were added in —it moved to -26 from -26.1.
Despite the fact that there were more potential targets on the bearish list, today’s trade idea is a bullish. Walgreens Boots Alliance (Nasdaq: WBA) appeared on the bullish list and it had decent fundamental ratings. It scores a 70 on the EPS rating system and a B on the SMR scale.
What really got my attention was the chart. We see how the lows from the past four months connect rather nicely to create a trend line. It also happens that a parallel trend line connects the highs to form an upper rail to the channel. The stock just hit the lower rail and it looks as though the stock is set to turn higher.
Buy to open the January week 5 57-strike calls on WBA at $2.50 or better. These options expire on January 31. In order for these options to double the stock will need to reach $62.00. The stock moved slightly above this level at its peak in November, so it won’t have to break to a new high. I suggest a target gain of 100% with a stop at $56.50.
— Rick Pendergraft
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