The indices were split on Thursday with two moving higher and two moving lower. The Nasdaq led the way for a third straight day and this time it was a gain of 0.55%. The S&P eked out a gain of 0.03% and it was the only other index to move higher.
On the down side, the Russell fell 0.66% and the Dow edged lower with a loss of 0.04%.
The sectors weren’t as fortunate as the indices and seven of the 10 moved lower on Thursday. The tech sector was the top performer with a gain of 1.30%. The consumer discretionary sector moved up 0.46% and the communication services sector tacked on 0.39% as the third group to finish in the black.
As for those losing ground, the energy sector fell 3.27% and continued to experience more volatility than the other groups. The materials sector dropped 1.48% and the financial sector lost 1.02%. Those were the only three that lost more than 1.0%.
My scans flipped back to the negative side last night with 25 bearish signals and 13 bullish signals.
Despite the negative skew on last night’s scans, the barometer inched up a bit. The final reading was -14.6 after a reading of -21.6 on Wednesday.
After a couple of bullish trade ideas in a row, I have a bearish trade idea for you today. The subject company is Invitae (NYSE: NVTA) and the fundamental ratings are poor with an EPS rating of 21. The SMR rating is a D.
The thing that jumped out at me on the chart was the shooting star candlestick from Wednesday and the follow through downward move yesterday. This is a reversal pattern and with the stochastic indicators making a bearish crossover that is a second bearish sign. I look for the stock to continue trending lower over the next few weeks.
Buy to open the March 55-strike puts on NVTA at $7.60 or better. These options expire on March 19, 2021. I suggest a target gain of 75% and that means the stock will need to drop to $41.70. That is in the same area where the stock bottomed in December. I recommend a stop at $57.50.
— Rick Pendergraft
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