Stocks jumped out of the gate on Monday and all four of the indices soared. Some encouraging words from Chairman Powell about what the Fed can do helped boost stocks and encouraging test results for a coronavirus vaccine added to the positive tone.
The Russell saw a huge jump of 6.1% and that was by far the top performance of the four. The Dow jumped 3.85% and the S&P gained 3.15%. The Nasdaq was the laggard of the four with move of 2.44%.
The industrial sector jumped 6.59% and that was the second best performance.
A total of five sectors saw gains of over 4%.
The healthcare sector saw the smallest gain at 0.83% and it was the only one that failed to gain 1.0%.
The second smallest gain was from the consumer staples sector at 1.59%.
My scans remained positive on Monday with 77 bullish signals and six bearish signals. These results combined with Friday’s are the biggest two-day positive count since March 24 and 25.
The barometer jumped from 16.0 to 50.8 and that is the highest reading since March 26.
Today’s trade idea is another bullish one and the company is Mylan (Nasdaq: MYL). The company appeared on the bullish list and it scores a 68 on the EPS rating scale and an A on the SMR grading system.
The chart shows how a trend channel has formed since the March low and the stock just bounced off of the lower rail. The upper rail is currently in the $18.35 range and the rails are relatively steep. The stochastic readings just made a bullish reversal out of oversold territory and that could be a signal of good things to come.
Buy to open the July 15-strike calls on MYL at $2.40 or better. These options expire on July 17. I suggest a target gain of 75% and that means the stock will need to reach $19.20. The upper rail should move up to that level within the next few weeks. I suggest as stop at $15.00.
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