The indices moved higher again on Friday and the S&P extended its weekly winning streak to four. All four of the main indices moved higher on Friday and for the week.
The S&P led the way on Friday with a gain of 0.49% and it was followed by the Nasdaq with a gain of 0.42%. The Russell moved up 0.29% and the Dow was close behind with a gain of 0.28%.
[hana-code-insert name=’adsense-article’ /]All 10 of the main sectors moved higher on Friday, but none of them moved up more than 1.0%.The energy sector led the way with a gain of 0.96%.
The consumer staples sector has the second best performance at 0.75%.
The financial sector experienced the smallest gain at 0.12% and it was followed by the consumer discretionary sector with a gain of 0.15%.
My scans remained negative and even turned more negative on Friday.
There were 53 names on the bearish list and 11 on the bullish list. That makes six straight days of negative results from the scans.
The barometer dropped from -24.5 to -31.7 once these results were added in to the equation.
Despite the large skew to the bearish side from the scans, I have a bullish trade idea for you today. ProLogis (NYSE: PLD) appeared on the bullish list and the company’s fundamental ratings are really good. The EPS rating is an 84 and the SMR rating is an A.
While the fundamentals are good, I really like the chart. The stock has been trending higher over the last year, but the trend channel that has developed over the last eight months really got my attention. The stock just hit the lower rail of the channel and looks primed to rally in the next few months. The two rallies that got my attention the most were the one from late May to mid-June and the one from early August to mid-September. In each of those rallies the stock rose over 10%.
Buy to open the February 85-strike calls on PLD at $5.30 or better. These options expire on February 21. In order for these options to double the stock will need to reach $95.60. The stock needs to rally approximately 10% from its recent low in order to for these options to double. I suggest a target gain of 100% with a stop at $86.50.
— Rick Pendergraft
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