Thursday saw all four indices open in positive territory, but only three would remain there throughout the day. The Russell dropped in to negative territory shortly after the open and would finish with a loss of 0.68% on the day.
The Nasdaq led the way with a gain of 0.78% and the S&P moved up 0.47% as the second best performer. The Dow eked out a small gain of 0.06% to round out the results.
Six of the 10 sectors moved higher on Thursday with healthcare leading the way with a jump of 1.71%. The tech sector rallied 0.74% as the second best performer.
The financial sector dropped 1.17% as the worst performer and the materials sector fell 0.60% as the second worst.
For the 12th straight day my scans produced a negative result and this time it was 36 bearish signals and 13 bullish signals.
The barometer did rise slightly to -35.1, but it remained in negative territory and that is the 16th straight negative reading for the indicator.
There were five stocks and ETFs on the bullish list that got my attention and there were five on the bearish list that did as well. The clear theme on the bullish list was precious metals stocks—all five that got my attention were either a gold mining company or a gold ETF. I decided that a bullish play on Barrick Gold (NYSE: GOLD) made the most sense. The company’s fundamental ratings are pretty good with an 82 EPS rating and an A SMR rating.
Most of the charts looked similar, but Barrick’s trend channel’s was the tightest and the risk/reward relationship made the most sense. We see that the stock has been moving higher within its channel since late February. The lower rail connects the lows from March, April, and now June. We also see that the stochastic indicators were the lowest they have been since late February/early March. The indicators made a bullish crossover last night.
Buy to open the August 22-strike calls on GOLD at $2.38 or better. These options expire on August 20, 2021. I suggest a target gain of 100% and that means the stock will need to reach $26.76. The target is 16.7% above yesterday’s low and looking at the rallies in March, April, and May, they were all in the 15% to 20% range. I suggest a stop at $22.50.
— Rick Pendergraft
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