The indices retreated from their all-time highs on Monday, but the losses were mild in most cases. All four indices opened and finished lower on the day. The Russell fell 1.36% as the worst performer and it was followed by the Nasdaq which lost 0.98%.
The S&P dropped 0.53% and the Dow was the top performer with a loss of only 0.36%.
Only one of the 10 main sectors managed to post a gain on the day and that was the healthcare sector with a very modest move of +0.02%.
The consumer discretionary sector was the only one that lost more than 1.0%, falling 1.12%. The tech sector dropped 0.83% as the second worst performer.
My scans turned in their 11th straight negative result last night with 52 bearish signals and eight bullish signals.
The barometer changed ever so slightly, moving up to -35.9 from -36.1.
None of the bullish signals looked all that appealing to me, so we have another bearish trade idea today. This time the company is Moderna (Nasdaq: MRNA) and its fundamental ratings aren’t very good. The EPS rating is very low at 7 while the SMR rating is a D.
In addition to the poor fundamental ratings we see that the stock is overbought based on both the 10-day RSI and the stochastic indicators. The stochastics made a bearish crossover last night. We see that the stock peaked just above $170 area last week and the stock peaked in that same area back in December before it dropped down below the $110 level.
Buy to open the June 165-strike puts on MRNA at $18.50 or better. These options expire on June 18, 2021. I suggest a target gain of 100% and that means the stock will need to drop to $128.00. The stock was below that target in early March and late March. I suggest a stop at $173.00.
— Rick Pendergraft
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