More selling hit the market on Wednesday and the trading curbs were triggered for the fourth time in the past month. The indices did reverse a little in the afternoon and closed off their lows.
The Russell took the biggest loss at 10.42%, but it was down over 13% at one point. The Dow dropped 6.3% and was down over 11% at the lows of the day. The S&P fell 5.18% and the Nasdaq finished with a loss of 4.7%.
All 10 main sectors fell on Wednesday, but the disparity in how sharp the losses were varied greatly.The energy sector fell an incredible 14.36% as oil dropped below $22 a barrel for the first time since 2002.
The second worst loss was the financial sector which fell 8.49%.
The consumer staples sector took the smallest loss at 2.57% and it was followed by the healthcare sector and the communication services sector with losses of 3.32%.
The tech sector was down 3.77% and was the only other sector that’s loss was below 4%.
The results from my scans dropped sharply last night with only seven stocks on the bullish list and no bearish signals.
The barometer dropped sharply with so few signals. The final reading was 88.9, down from 139.7 the night before.
Even though there were only seven stocks on the bullish list, there was one particular stock that I liked. Extra Space Storage (NYSE: EXR) triggered a bullish signal and the company scores a 72 on the EPS rating system and an A on the SMR grading scale.
On the chart we see that the stock formed a bullish engulfing pattern on Wednesday and that is a bullish signal. We also see that the stochastic indicators made a bullish crossover after the stock rebounded yesterday and the 10-day RSI reversed out of oversold territory.
Buy to open the June 85-strike calls on EXR at $14.40 or better. These options expire on June 19. With the volatile market and the high option premiums, I suggest a target gain on this trade of 50%. This means the stock will need to reach 106.60. That will put the stock near its 50-day moving average. I suggest a stop at $80.50.
— Rick Pendergaft
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