Stocks screamed higher out of the gate on Monday and the indices recorded some of their best gains in months. All four indices opened higher and remained there throughout the day.
The Russell led the way with a gain of 3.37% and it was followed by the Nasdaq with a gain of 3.01%. The S&P moved up 2.38% and the Dow rose 1.95%.
All 10 main sectors moved higher on the day with eight of them gaining over 2.0%. The tech sector led the way with a jump of 3.22% and the financial sector rallied 3.13%. Those were the only two that gained over 3.0% on the day.
The only two sectors that failed to gain 2.0% were healthcare (+1.31%) and consumer staples (+1.01%).
My scans turned positive after the gains on Monday with 54 bullish signals and four bearish signals.
The barometer jumped in to positive territory thanks to the results, coming in at 6.7 after a reading of -13.6 on Friday.
I have another bullish trade idea for you today as there were a number of stocks with strong trade setups. Out of all of them, I felt a bullish trade on Chegg, Inc. (NYSE: CHGG) was the best one for its risk/reward possibilities. The company gets great fundamental ratings with a 91 EPS rating and an A SMR rating.
The daily chart shows how a trend channel has formed over the last few months and the stock just hit the lower rail of the channel. We also see that the stochastic indicators were in oversold territory and made a bullish crossover last night. The upper rail is up at $115 and moving higher, but the $115 area also marked the high in February.
Buy to open the April 95-strike calls on CHGG at $9.30 or better. These options expire on April 16, 2021. I suggest a target gain of 100% and that means the stock will need to reach $113.60, just below the February high. I recommend a stop at $93.00.
— Rick Pendergraft
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