The indices jumped sharply on Friday on a follow through from the big gains on Thursday. All four experienced substantial gains with the Russell leading the way with a gain of 2.47%.
The Nasdaq jumped 2.32% and the S&P rallied by 1.49%. The Dow lagged the other three, but still logged a gain of 1.06%.
All 10 sectors moved higher on Friday and seven gained over 1.0%. The energy sector was the top performer with a huge 3.1% jump. The tech sector moved up 2.2% and the communication services sector rallied 1.97%.
The defensive sectors were the three that failed to gain at least 1.0%. Consumer staples gained 0.44%, utilities moved up 0.49%, and the healthcare sector gained 0.50%.
My scans turned sharply more positive on Friday with 113 bullish signals and only one bearish signal.
The barometer jumped drastically with those results and the final reading was 38.3, up from -22.8.
Obviously there were an abundance of trade scenarios to consider on the bullish list and I decided the best set up was on Dell Technologies (NYSE: DELL). The stock was on the bullish list and its fundamentals are solid with an EPS rating of 76 and SMR rating of an A.
We see how the stock has been trending higher since November and a trend line connects the lows from 2021. The stock hit that trend line last week and then bounced sharply. The stochastic indicators hit their lowest levels since November and they made a bullish crossover.
Buy to open the July 95-strike calls on DELL at $6.95 or better. These options expire on July 16, 2021. I suggest a target gain of 100% and that means the stock will need to reach $108.90. That is above the high from April, but based on the moves from January through March and from late March through mid-April, I think the target is achievable. I suggest a stop at $93.00.
— Rick Pendergraft
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