Stocks were mixed on Monday with three of the four main indices moving lower. There was a deal struck between OPEC+ members on Sunday as the group agreed to production cuts. Initially oil opened higher, but it slid throughout the day and finished with a small loss.
The Nasdaq managed to gain 0.48% after dropping in the morning and it was the only one of the four sectors that gained ground. The Russell took the worst loss at 2.78%. The Dow dropped 1.39% and the S&P fell 1.01%. With the exception of the Russell, the indices closed well off of their lows.
Eight of the 10 main sectors lost ground on Monday.The tech sector tacked on 0.26% and the communication services sector eked out a gain of 0.15% and those were the only two sectors in the black.
The financial sector took the worst loss at 3.64% and the utilities sector dropped 3.21%.
These were the only two sectors that fell over 3.0%.
The industrial sector was close with a decline of 2.93%.
My scans continued their shift to the bearish side with 180 bearish signals and only three bullish signals.
When these results were added in to the equation, the barometer fell to -93.4 and that is the lowest reading since last June.
For the third straight day I have a bearish trade idea for you. Given the overall outlook from the barometer that shouldn’t be surprising. Today’s subject company is Nutrien Ltd. (NYSE: NTR) and it scores a 25 on the EPS rating scale and a C in the SMR grading system.
The daily chart shows how the stock dropped dramatically in the first quarter and has made an incredible bounce from the March low. However, the stock is now hitting resistance at its 50-day moving average and it is overbought based on the daily stochastic readings. The indicators did make a bearish crossover last night.
Buy to open the June 40-strike puts on NTR at $5.40 or better. These options expire on June 19. With the option premiums and volatility high, I suggest a target gain 100%.For the options to double the stock will need to drop to $29.20. The stock was down below the $25 level back in March so it won’t have to reach a new low. I suggest a stop at $38.00.
— Rick Pendergraft