All four of the indices moved higher on Friday and that was the first time we had seen a consensus move since Monday. Investors seemed to have mixed feelings throughout the week with risk factors seemingly becoming important again.
The Nasdaq led the way with a gain of 0.50% and the S&P was right behind it with a gain of 0.47%. The Russell rallied late to finish with a gain of 0.18% and the Dow inched up 0.09%,
Nine of the 10 main sectors moved higher on Friday with three gaining over 1.0%. The energy sector led the way with a gain of 1.48%. Financials and materials tied for the second best performance with each sector gaining 1.03%.
The utilities sector was the lone sector that finished in the red and the loss was 0.73%. Consumer discretionary stocks lagged and the sector registered the smallest gain at 0.14%.
My scans saw a bit of a drop in the bearish signals on Friday, but remained negatively skewed. There were 51 bearish signals and seven bullish signals on the day.
The barometer rose a little as the weighting of the big negative readings started to decline. The final reading was -84.3, up from -97.8 on Thursday.
Even though the bearish signals continue to be more abundant, I have a second straight bullish trade idea for you today. Bristol Myers Squibb (NYSE: BMY) appeared on the bullish list again and it has great fundamental ratings. The EPS rating is 96 and the SMR rating is an A. I recommended calls on Bristol Myers at the end of December as well and that one worked out well.
If we connect the closing lows from June and October, we get a trend line that connects the lows from the past week. The stock is oversold based on the stochastic indicators and the RSI is the lowest it has been since late October. The stochastic indicators made a bullish crossover on Friday.
Buy to open the April Week One 56-strike calls on BMY at $5.00 or better. These options expire on April 2, 2021. I suggest a target gain of 100% and that means the stock will need to reach $66.00. The stock was up above $67 in January, so it won’t have to reach a new high to hit our target. I recommend a stop at $58.00.
— Rick Pendergraft
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