The main indices continued to climb on Friday with all four moving higher. The Russell led the way for a fourth straight day and it wasn’t even close this time. The small cap index jumped 1.02% on Friday.
The second best performance came from the S&P with a gain of 0.39% while the Nasdaq moved up 0.34%. The Dow lagged the other three a little, but still tacked on 0.17%.
Eight sectors moved higher on the day while one fell and one was unchanged. The energy sector dropped 0.64% and the healthcare sector was the one that was unchanged.
The utilities sector moved up 0.69% for second place and the tech sector gained 0.67% for third place.
My scans continued to spit out more bearish signals than bullish signals.
The results from Friday showed 39 names on the bearish list and 10 names on the bullish list.
The barometer fell to -24.2 after these results were added in to the equation.
The indicator has moved lower every day since the positive reading on January 13 became the first positive reading since December 9.
Given the difference in the size of the two lists, it was much easier to find a bearish setup that I liked than a bullish one. As a result, today’s trade idea is a bearish one on TripAdvisor (Nasdaq: TRIP). The company appeared on the bearish list and the fundamentals are pretty weak with an EPS rating of 38 and an SMR rating of a C.
The chart shows how the stock has been declining over the past year and how the downward trend has been defined by a trend channel. The stock hit the upper rail of the channel this past week and the stochastic readings made a bearish crossover at the same time. I look for the stock to move lower in the coming weeks.
Buy to open the March 32.50-strike puts on TRIP at $3.00 or better. These options expire on February 21. In order for these options to double the stock will need to drop to $26.50. The low back in November was $26.03, so the stock won’t have to break to a new 52-week low to hit our target. I suggest a target gain of 100% with a stop at $32.00.
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