The S&P failed to follow the pattern on Friday as all four indices moved higher. That snapped an odd three day stretch where three of the four indices moved higher while the one that fell was different for all three days.
The Russell led the way on Friday with a gain of 0.88% and the S&P was second with a gain of 0.67%. The Nasdaq moved up 0.60% and the Dow rounded out the gains with a move of 0.57%.
All 10 of the main sectors moved higher on Friday and it was the energy sector that led the way.The sector gained 1.79% and it was followed by the materials sector with a gain of 1.19%.
The healthcare sector gained 0.22% on the day and that was the smallest of the bunch.
Communication services only gained 0.24% and the utilities sector only inched up 0.29% as the second and third worst performances.
My scans were pretty negative again on Friday, but the net total wasn’t as bad as Thursday.
There were 47 bearish signals and 17 bullish signals for a net total of -30.
The barometer dropped from -11.1 to -23.5 once these results were added in to the calculation.
Even though there were a fare number of stocks on both sides of the equation from Friday night, there weren’t a great number of trade setups on either side that got my attention. The one that I liked the most was IHS Markit Ltd. (NYSE: INFO). The company appeared on my bullish list and it has great fundamental readings. The EPS rating is an 88 and the SMR rating is an A.
IHS Markit has been on my radar for a while due to its fundamental ratings. The chart shows how the stock has rebounded from the March selloff and how a trend channel has formed since early April. The stock just hit the lower rail of the channel and it is oversold for the first time since March, based on the stochastic indicators.
Buy to open the October 75-strike calls on INFO at $8.00 or better. These options expire on October 16. I suggest a target gain of 75% and that means the stock needs to reach $89.00. That price is above the most recent high, but it shouldn’t mean the stock has to break above the upper rail of the trend channel. I recommend a stop at $75.00.
— Rick Pendergraft
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