Stocks got hit with some major selling as renewed concerns about the COVID-19 virus hit investors. New cases in Florida and California hit records in the last few days and that seemed to spook investors.
The Russell took the worst hit with a loss of 3.45%. The Dow fell 2.72% and the S&P dropped 2.59%. The Nasdaq took the smallest loss of the four at 2.19%.
[the_ad id=”102771″]All 10 sectors declined on the day with varying degrees of losses.
The energy sector was the worst performer with a drop of 5.55%.
Financials were the second worst performer with a drop of 3.53% and the industrial sector fell 3.48%.
Those were the only three sectors that dropped over 3.0%.
The utilities sector took the smallest loss at 0.91% and the consumer staples sector fell 1.68%. Those were the only two groups that fell less than 2.0%.
My scans remained bearish with 44 signals from that side and 16 bullish signals. That makes five straight days of negatively skewed results.
The barometer fell to -24.5 after a reading of -22.2 on Tuesday.
Even though there were a number of stocks on each list, there weren’t that money trade setups that I liked. The one I liked most was on Incyte (Nasdaq: INCY). The biotech firm appeared on the bearish list and its fundamental ratings are mixed. The EPS rating is 14 and the SMR rating is a B.
Incyte was overbought a few days ago and the 10-day RSI has fallen below the 70 level. The stochastic indicators are still in overbought territory, but the indicators did make a bearish crossover last night. Similar turns in early June and in February preceded declines in the stock.
Buy to open the August 105-strike puts on INCY at $8.00 or better. These options expire on August 21. I suggest a target gain of 75% for this trade and that means the stock will need to drop to $91.00. The stock was down at $90 earlier this month. I recommend a stop at $108.00.
— Rick Pendergraft
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