Stocks closed out November with a bit of a whimper, but despite the losses for the indices it was still a great month for stocks. The Dow gained 11.9% for its best monthly gain since January 1987.
All four of the main indices lost ground on Monday with the worst performance coming from the Russell at -1.91%. The Dow fell 0.91% and the S&P 500 dropped 0.46%. The Nasdaq inched in to positive territory in the final hour, but finished with a small loss of 0.06%.
Eight of the 10 main sectors fell on the day with the tech sector (0.67%) and the healthcare sector (0.24%) being the only two groups that gained ground.
The energy sector took a big hit with a drop of 5.5% on the day. The financial sector fell 2.07% and the utilities sector dropped 1.44% as the second and third worst performers. Those were the only three sectors that lost over 1.0%.
My scans remained negatively skewed with 128 bearish signals and 20 bullish signals last night.
The barometer dropped sharply once again after two straight big negative readings. The final reading for Monday was -80.4, down from -50.4 on Friday.
After three straight bearish trade ideas, I have a bullish idea for you today. Abbott Laboratories (NYSE: ABT) appeared on the bullish list last night and it has great fundamental ratings. The EPS rating is 81 and the SMR rating is an A.
We see on the chart how the stock has been grinding higher over the last few months with a trend channel forming that defines the different cycles within the overall trend higher. The stock just hit the lower rail of the channel and we saw a bullish crossover from the daily stochastic indicators.
Buy to open the January 105-strike calls on ABT at $6.25 or better. These options expire on January 15 2021. I suggest a target gain of 75% and that means the stock will need to reach $115.95. That is slightly higher than the high in early November, but the upper rail should be above that level within the next few days.
–Rick Pendergraft
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