The selling that hit stocks on Thursday carried over to Friday and the indices all fell for a second straight day. The losses on Friday were sharper than they were the day before.
The Russell fell 3.83% on the day and that was its second straight drop of over 3%. The Nasdaq also dropped over 3.0% on Friday with a loss of 3.2%. The S&P declined 2.81% and the Dow lost 2.55% to round out the losses.
All 10 sectors lost ground for a second straight day.The energy sector took the worst hit at -5.66%.
The consumer discretionary sector fell 3.74% and it was one of three other sectors that fell more than 3.0%.
The consumer staples sector dropped 1.1% and that was the smallest loss of the bunch.
Communication services stocks fell 1.39% and healthcare stocks fell 1.91% and those were the only three that lost less than 2.0%.
My scans were only slightly less negative on Friday after a very negative reading on Thursday. There were 108 bearish signals and only one bullish signal.
The barometer dropped to -95.8 once these results were added in to equation and that is the lowest reading since April 16.
With the abundance of stocks on the bearish list, today’s trade idea is another bearish one. Louisiana Pacific (NYSE: LPX) was on the list and its fundamental ratings are bad. The EPS rating is only 27 and the SMR rating is an E—the worst possible rating.
The stock has just rallied back up to its 50-day moving average and appears to have found resistance there. The 10-day RSI hit overbought territory and the stochastic indicators were in overbought territory and made a bearish crossover on Friday.
Buy to open the June 20-strike puts on LPX at $2.30 or better. These options expire on June 19. I suggest a target gain of 100% for this trade. In order for these options to hit our target the stock will need to reach $14.40. The stock was down around $13 in March. I suggest a stop at $21.30.
— Rick Pendergraft
This is the #1 Stock to Buy for the AI Tidal Wave [sponsor]Marc Chaikin warned people about NVDA before its 2023 bull run - now he's naming his next pick or the AI tidal wave. Learn more here.