Stocks were mostly higher on the first trading day of 2020 with global indices jumping after China’s central bank changed monetary policy to be more accommodative. There were exceptions in various indices, but the vast majority moved higher.
Three of the four main domestic indices moved higher, but the Russell dropped 0.10% and had to rally at the end of the day to limit the loss. The Nasdaq led the way with a gain of 1.33% and the Dow jumped 1.16%. The S&P tacked on 0.84%.
Seven of the 10 sectors moved up on Thursday, but the differences in the results were rather large.The industrial sector led the way with a gain of 1.89% and the tech sector was right behind with a gain of 1.88%.
On the down side, the utilities sector fell 1.25% and the materials sector dropped 1.17%.
It was an unusual day seeing the combination of winners and losers among the sectors.
My scans stretched their run of negative readings to 13 days. There were 27 names on the bearish list and 14 names on the bullish list. There are so many stocks in overbought territory right now that we will likely see the bearish list remain larger than the bullish list for a while.
The barometer continued to inch its way higher on Thursday. The reading was -20.1 and that was up from the -29.2 reading on Tuesday.
Today’s trade idea is another bullish one and this time it is on the iShares MSCI Japan ETF (NYSE: EWJ). The fund appeared on the bullish list, but we don’t have fundamental readings since it is an ETF. Tickeron’s A.I.dvisor, the artificial intelligence platform I use sometimes, generated a bullish signal for the EWJ on Tuesday. It shows that 89% of past signals have been successful.
The fund has been trending higher since mid-August and a trend channel has formed that defines the cycles within the overall trend. The ETF moved down to the lower rail earlier this week and found support at its 50-day moving average at the same time. We see that the daily stochastic readings hit oversold territory and then made a bullish crossover last night. The last two times the indicators have been below 30 and made a bullish crossover, the fund rallied over 8% within a month and a half.
Buy to open the February 58-strike calls on EWJ at $2.45 or better. These options expire on February 21. In order for these options to double the fund will need to reach $62.90. To reach the target the fund will need to reach a new all-time high. Based on the last two bullish stochastic crossovers, I think the fund can reach our target.
— Rick Pendergraft
Collect up to 5 dividend checks per week [sponsor]Hi, I'm Tim Plaehn, and I just did the math in my own, real-money portfolio. I'll be collecting 70 dividend checks this quarter. That's nearly 5 per week on average. Automatically… no trading, no options, no work. You don't need a lot of money. You can be retired or near retirement... Either way, I'll show you my #1 plan to quickly collect dividends like clockwork from high-quality, cash-flowing business. Click here to learn how to collect up to 5 dividends a week.