Tuesday saw the indices hover near the breakeven level for most of the day, but when Fed Chairman Powell and Treasury Secretary Yellen started speaking before Congress, stocks took a turn lower and that downward move continued throughout the afternoon. All four main indices fell on the day, but the Russell got hit really hard and tumbled 3.55%.
The Nasdaq dropped 1.12% as the second worst performer. The Dow fell 0.94% and the S&P declined the least at 0.76%.
Eight of the 10 sectors fell on the day with only the safe havens gaining ground. The utilities sector gained 1.52% and the consumer staples sector tacked on 0.42%
There were four sectors that lost over 1.0% on the day with the biggest loss coming from the materials sector which fell 2.08%. The industrial sector dropped 1.76%, the energy sector declined 1.52%, and the financial sector lost 1.46%.
My scans turned positive on Tuesday and that snapped a nine-day streak of negative readings. There were 30 bullish signals and 11 bearish signals on the day.
The barometer jumped again, finishing with a reading of -15.8, up from -54.1 the night before.
I have a second straight bullish trade idea for you today and the company is Williams Cos. (NYSE: WMB). The stock was on the bullish scan last night and it has good fundamental indicators. The EPS rating is 89 and the SMR rating is a B.
The daily chart shows an upward trend over the last five months with a trend channel forming since the beginning of the year. The stock hit the lower rail yesterday and the daily stochastic indicators made a bullish crossover. We see the same circumstances at the end of December and again at the beginning of February. In each of those cases the stock rallied over 15%.
Buy to open the May 21-strike calls on WMB at $2.55 or better. These options expire on May 21, 2021. I suggest a target gain of 100% and that means the stock will need to move up to $26.10. This target will mean a new 52-week high, but the upper rail will be above that level in just a few weeks. I recommend a stop at $22.25.
— Rick Pendergraft
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