Stocks opened lower on Monday and then gradually moved higher throughout the day. The indices all closed at or near their highs of the day. The Nasdaq led the way with a gain of 1.11% and it was followed closely by the Russell with a move of 1.05%.
The S&P gained 0.65% and the Dow notched a gain of 0.59%.
Seven of the 10 main sectors moved higher on the day and the tech sector led the way with a jump of 1.88%.The consumer discretionary sector gained 1.03% and it was the only other sector to gain more than 1.0%.
The financial sector was the worst performer with a loss of 0.50%.
The other two that finished in the red were healthcare (-0.38%) and consumer staples (-0.29%).
My scans were bearishly skewed for a third straight night with 27 bearish signals and only two bullish signals.
The barometer dropped to -21.3 from -0.8 once the figures were included.
Neither of the stocks on the bullish list had decent fundamentals while there were only a few on the bearish list with bad fundamentals. One stock on the bearish list with mixed fundamental ratings was Bausch Health (NYSE: BHC). The company sports an EPS rating of 40 and an SMR rating of a B.
The thing that got my attention on the chart was the potential for a double-top pattern at in the $20.40 to $20.60 range. In order to confirm the pattern, the stock will need to drop below $16.40. I look for the stock to revisit the lows from the first half of May as it moves out of overbought territory.
Buy to open the August 21-strike puts on BHC at $2.85 or better. These options expire on August 21. I suggest a target gain of 75% and that means the stock will need to drop to $16.00. The stock was below that level in May. I suggest a stop at $20.75.
— Rick Pendergraft
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