Friday saw mixed results for the indices once again as three moved higher and one moved lower. This time it was the Russell that lost ground and it was only a 0.18% decline.
The Dow led the indices with a gain of 0.19% and the Nasdaq gained 0.09%. The S&P moved up 0.08% and that is the third straight positive day for it and for the Dow. All four indices turned a little lower in to the close.
Six sectors moved higher on Friday while three moved lower and one was unchanged. The industrial sector was the one that didn’t change. The communication services sector dropped 0.33% as the worst performer and it was followed by the consumer discretionary sector with a loss of 0.14%.
The utilities sector was the top performer with a gain of 0.54%. The healthcare sector gained 0.39% and it was followed closely by the tech sector with a gain of 0.36%.
The scans remained negative on Friday with 33 bearish signals and 17 bullish signals. That is the fourth straight day of a negative skew for the scans.
The barometer dropped a little lower to -14.5, down from -10.0 on Thursday.
Following a recent pattern of a bullish trade idea followed by a bearish idea, today’s trade idea is a bullish one on Cimarex Energy (NYSE: XEC). The company appeared on the bullish list and its fundamental indicators are mixed. The EPS is well above average at 76, but the SMR rating is below average at a D.
The chart was a big driver behind this trade idea. We see the trendline connecting the lows since late October and that was the first thing that jumped out at me. I also couldn’t help but notice the big upward moves when the stochastic indicators have made a bullish crossover in the last six months. We see moves over 25% in November, December/January, February, and March/April.
Buy to open the July 60-strike calls on XEC at $10.00 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 $80.00. The target is above the recent high, but given the big moves when the stochastic readings have made bullish crossovers, I think the target is reachable. I suggest a stop at $63.25.
— Rick Pendergraft
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