Thursday seemed like a day of extremes. I saw numerous stocks with gains of over 4% and a number of others with losses greater than 4.0%. Even the indices had pretty wide differences in their performances. The Nasdaq opened higher and remained in positive territory all day, finishing with a gain o 0.87%. The Dow opened lower and remained in negative territory all day and it finished lower by 0.62%. At the lows of the day the Dow was down over 1.0%.
The S&P waffled back and forth across the breakeven line all day long, but finished with a loss of 0.04%. The Russell experienced the worst loss at 1.18%.
The sectors also saw rather extreme differences in their performances. Four would finish lower and all of them lost more than 1.5%. The energy sector was the worst performer with a loss of 3.4% and it was followed by the financial sector which lost 2.96%.
On the positive side of the ledger, the tech sector gained 1.16% to lead all sectors. The healthcare sector rallied 0.76% to finish in second place.
My scans turned in a third straight negative result last night, but the difference between the two lists dropped considerably. There were 19 bearish signals and 12 bullish signals generated.
The barometer moved a little bit higher once these results were added in to the equation, inching up to -17.2 from -19.6.
After two straight bullish trade ideas, I have a bearish one for you today. Airbnb (Nasdaq: ABNB) appeared on the bearish list and the company has poor fundamental ratings. The EPS rating is only 10 and the SMR rating is an E.
The daily chart shows how the stock has been trending lower since February and a trend channel has formed since the March high. The stock just hit the upper rail in the last few days and there is a secondary layer of resistance with the 50-day moving average just overhead.
Buy to open the August 155-strike puts on ABNB at $14.60 or better. These options expire on August 20, 2021. I suggest a target gain of 75% and that means the stock will need to drop to $129.45. That target is slightly below the low in May, but the lower rail is already down near $110. I suggest a stop at $160.50.
— Rick Pendergraft
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