The selloff that started last Friday continued in to Monday and the selling worsened as investors became more anxious about the coronavirus. The selling started in the Far East and proceeded to move westward as each market opened.
In terms of the domestic indices, the Nasdaq took the worst hit at 1.89%. The Dow and S&P each fell 1.57% while the Russell managed the smallest loss at 1.09%.
All 10 of the main sectors fell on Monday.Three sectors dropped over 2.0% and the energy sector was the worst performer with a loss of 2.77%.
The tech sector fell 2.38% and the materials sector declined 2.16%.
As for the sectors that dropped the least, the utilities sector only dropped 0.25% while the consumer staples sector fell 0.31%.
The healthcare sector lost 0.76% and those are the only three sectors that didn’t lose at least 1.0%.
My scans snapped their string of negative readings Monday night, but they didn’t start a new streak of positive readings. That’s right they finished with net reading of zero on Monday night. There were 19 names on each of the lists.
The barometer rose to -12.4 once this net result was added in to the equation. The reading from Friday night was -27.1.
Even though the lists were even yesterday, I didn’t like any of the setups on the bullish list. Therefore today’s trade idea is another bearish one and the company is Brixmor Property Group (NYSE: BRX). Obviously the stock was on the bearish list based on what I stated earlier. The company’s fundamentals are average with an EPS rating of 58 and an SMR rating of a C.
We see that the stock has been moving lower within a trend channel and it just went above the upper rail but dropped back below it yesterday. The stock also appears to have hit resistance at its 50-day moving average. The stochastic indicators are in overbought territory and made a bearish crossover last night.
Buy to open the March 22.50-strike puts on BRX at $1.95 or better. These options expire on March 20. In order for these options to double the stock will need to drop to $18.60. The stock saw the $18.50-$18.70 area act as resistance back in August, and that area could now act as support. I suggest a target gain of 100% with a stop at $21.20.
— Rick Pendergraft
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