Stocks stretched the winning streak to three straight days as all four indices moved higher again on Tuesday. All four did spend some time in negative territory, so it wasn’t a clear cut risk-off day like we saw on Monday.
The Russell led the way for a second straight day and this time the gain was 0.63%. The Dow was right behind with a move of 0.62%. The S&P edged up 0.36% and the Nasdaq tacked on 0.35%.
As for the sectors, eight of the 10 moved higher on the day.The only two in negative territory were financials and healthcare with losses of 0.50% and 0.42%, respectively.
The energy sector was the big winner on Tuesday as it gained 2.43%. The materials sector moved up 1.33%. Consumer staples jumped 1.25% and utilities tacked on 1.06% to give us four sectors that gained more than 1.0%.
My scans produced a positive result with 32 bullish signals and 21 bearish signals. That is only the second positive day since July 15.
The barometer moved higher once these results were added in to the equation, moving to -10.2 from -18.3.
Even though there were a fare number of bearish signals last night, there wasn’t a single trade setup that stood out. That left me with several bullish setups to consider and the one I liked the best was on Alkermes (Nasdaq: ALKS). The pharmaceutical company scores a 90 on the EPS rating scale and it gets a B on the SMR grading system.
Even though the fundamental ratings were part of the decision, the chart was a bigger factor. The stock has been trending higher since May 1 and the channel that has formed is rather steep. The stock just hit the lower rail and turned higher while the stochastic indicators made a bullish crossover. I also took note of the fact that the $18 area seemed to act as support and it acted as resistance back in early June.
Buy to open the November 16-strike calls on ALKS at $4.30 or better. These options expire on November 20. I suggest a target gain of 100% and that means the stock will need to reach $24.60. The stock topped at $25.35 in July ’19, so that area could act as resistance, but for the stock won’t have to break through that resistance to hit our target. I suggest a stop at $17.00.
— 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.