Stocks continued to rally on Thursday as fears of additional military actions in the Middle East dwindled. All four of the main indices moved higher once again and the Nasdaq led the way once again, this time it gained 0.81%.
The Dow gained 0.74%, the S&P moved up 0.67%, and the Russell inched up 0.08%.
All 10 sectors moved higher on Thursday.The tech sector was the top performer with a gain of 1.13%.
The energy sector moved up 0.74% and that was good enough for second place honors.
The materials sector tacked on 0.37% and that was the smallest gain of the bunch on Thursday.
The industrial sector tacked on 0.42% and that was the second smallest gain.
My scans finally snapped their streak of negative readings last night with 41 names on the bullish list and 18 names on the bearish list.
The barometer continued its climb and is close to moving back in to positive territory for the first time in a month. The final reading last night was -5.5, up from -21.3 the night before.
With the switch to a bullish skew from the scans, I have a bullish trade idea for today. The SPDR Regional Banking ETF (NYSE: KRE) appeared on the bullish list and it also got a bullish signal from Tickeron’s A.I.dvisor on Wednesday. The signal shows a confidence level of 89% and past predictions have been successful 95% of the time.
The daily chart shows a trend line that connects the lows from October and December. The stock just hit that trend line and bounced. The daily stochastic indicators were close to oversold territory and made a bullish crossover last night. The 10-day RSI dropped below the 40 level and the indicator was below that level at the October and December lows before rallying.
Buy to open the February 57-strike calls on KRE at $1.90 or better. These options expire on February 21. In order for these options to double the fund will need to reach $60.80. The fund will need to reach a new high, but it only has to climb 5.7% for these options to double. I suggest a target gain of 100% with a stop at $56.50.
— Rick Pendergraft
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