Stocks opened higher on Wednesday, pulled back in the middle of the day, and then rallied in the afternoon. All four of the indices finished with gains on the day, but the Russell was far and away the leader with a gain of 3.5%.
The S&P finished with the second best gain at 0.91% and it was followed the Dow with a move of 0.85%. The Nasdaq was the only one of the four that was in the red at any point during the day, but it finished with a gain of 0.59%.
Nine of the 10 sectors moved higher on the day with utilities being the lone one to finish with a loss. The loss was only 0.39%, but it is reflective of a risk-on environment.The industrial sector was the top performer on the day with a gain of 2.55% and it was followed by the energy sector with a gain of 2.16%. The financial sector came close to giving us a third sector with gains over 2.0%, but it came up just short at 1.98%.
My scans turned an ever so slight positive result last night with nine bullish signals and seven bearish signals.
The barometer inched up a little after these results were added in, moving from 5.7 to 7.8 on the day.
Even though there weren’t an abundance of stocks on either list, there were a number of stocks that got my attention. The one that I felt gave us the greatest odds of success was a bullish trade idea on Paychex (Nasdaq: PAYX). The company scores an 80 on the EPS rating system and an A on the SMR grading scale.
Paychex reported earnings last week and pulled back for a few days despite beating EPS estimates. The stock found support at the $70 area on Tuesday and then bounced from there. The bounce caused the daily stochastic indicators to make a bullish crossover and the stock to move back above its 50-day moving average.
Buy to open the September 70-strike calls on PAYX at $6.20 or better. These options expire on September 18. I suggest a target gain of 75% and that means the stock will need to reach $80.85. The stock peaked at $80.64 in early June, so it will need to move just above that level to hit our target. I recommend a stop at $70.50.
— Rick Pendergraft
Legendary Stockpicker: "Buy this A.I. stock NOW" [sponsor]His award-winning system pinpointed NVDA and META before both stocks doubled. Now it's flashing "BUY" on this under-the-radar A.I. stock. MORE HERE...