Stocks were mixed on Tuesday with three of the indices moving lower and one moving higher. The Nasdaq opened higher and stayed in positive territory all day long, finishing with a gain of 0.64%.The Dow opened lower and remained in negative territory for the rest of the day, ending the day with a loss of 0.80%.
The S&P waffled back and forth from gains to losses throughout the day, but finished on a down swing to drop 0.30% on the day. The Russell opened slightly higher, but it trended lower throughout the day and would finish with a loss of 0.90%.
Two sectors moved higher on the day while eight moved lower. The communication services sector led the way with a gain of 0.64% and the tech sector tacked on 0.50% as the second sector that gained ground.
The industrial sector fell 2.19% and was the worst performing sector on the day. The financial sector dropped 1.82% and the energy sector declined 1.37% as the only other two sectors that lost more than 1.0%.
My scans were negative for a second straight night, but not by much. There were 22 names on the bearish list and 19 on the bullish list.
The barometer dropped in to negative territory once these results were added in, falling from 4.4 to -0.4.
With the bullish signals and bearish signals almost equally split, there were a number of stocks I took in to consideration for today. I felt Digital Turbine (Nasdaq: APPS) gives us the best odds of success. The company appeared on the bullish list and it has good fundamental ratings with an EPS rating of 76 and an SMR rating of an A.
Two things jumped out on the chart. The first thing was how the stock found support at its 50-day moving average. I noticed the trend channel as I looked at the chart a little longer. The channel has defined the overall upward trend over the last three months and the lower rail is right on top of the 50-day.
Buy to open the December 30-strike calls on APPS at $5.90 or better. These options expire on December 18, 2020. I suggest a target gain of 100% and that means the stock will need to reach $41.80. The stock was as high as $42.36 a few weeks ago. I recommend a stop at $30.00.
— Rick Pendergraft
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