Stocks waffled back and forth quite a bit on Wednesday and the indices ended up finishing with an even split. Two moved higher and two moved lower.
The Nasdaq led the way with a gain of 0.43% and it was joined in positive territory by the S&P which gained 0.23%. The Russell fell 0.75% and the Dow dropped a meager 0.03%.
Once again the sectors were evenly split with five moving higher and five moving lower. The utilities sector led the way with a gain of 1.95% and it was followed by the tech sector with a gain of 0.64%.
The materials sector was the worst performer with a loss of 1.02%. The industrials sector fell 0.86% as the second worst performer.
My scans remained bearish for a third straight night with 76 bearish signals and 14 bullish signals.
The barometer dropped to -66.6 from -58.1 once these results were added in to the equation.
I have a bullish trade idea for you today and it is on the iShares U.S. Preferred Stock ETF (Nasdaq: PFF). Because this is an ETF we don’t have the usual fundamental ratings to consider. In addition to being on my bullish list last night the fund got a bullish signal from Tickeron, the artificial intelligence platform I use. The signal shows a confidence level of 81% for an upward move over the next month.
The chart shows how the fund has been moving higher within the confines an upwardly sloped trend channel over the last seven months. The stock just hit the lower rail and found support at the 50-day moving average. We see that the stochastic indicators made a bullish crossover last night and when they did that back in October the fund rallied by over 7%.
Buy to open the April 37-strike calls on PFF at $1.60 or better. These options expire on April 16, 2021. I suggest a target gain of 100% and that means the fund will need to reach $40.20. That would be a new high, but it is only 5.3% above Wednesday’s closing price. I recommend a stop at $37.40.
— Rick Pendergraft
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