Wednesday started off looking pretty promising as all four main indices opened higher and nine of the 1o main sectors did as well. Unfortunately there was some selling that hit the market in the morning and by lunchtime all four indices had dropped in to negative territory. The final results showed two moving higher and two moving lower.
The Russell took a pretty big hit for a second straight day and fell 1.61% on the day. The Nasdaq also finished in the red, but it only lost 0.22%.
The Dow moved up 0.13% to lead the way while the S&P tacked on 0.12%.
At the end of the day, seven of the 10 main sectors would finish in the red. The energy sector took a huge hit, falling 2.92%. The next biggest loss was 0.49% and that was from the financial sector.
The consumer staples sector was the top performer with a gain of 0.89% and it was followed closely by the utilities sector with a gain of 0.87%. The tech sector moved up 0.79% as the third sector to move higher on the day.
My scans turned in a second straight negative result last night with 32 bearish signals and only five bullish signals.
The barometer continued to fall once these results were added in to the equation, dropping to 0.5 from 20.0.
I have a second straight bearish idea for you today after none of the bullish signals looked like good setups to me. The subject company is Teck Resources (NYSE: TECK) and its fundamental ratings are mixed. The EPS rating is good at 89, but the SMR rating is a D.
The daily chart shows how the stock has been trending lower since peaking in early May. A trend channel has formed over the last two months and the stock hit the lower rail earlier this week and has moved lower since. Based on the big declines from mid to late May, and the big one from the beginning of June through the middle of the month, I expect the stock to drop at least 15%.
Buy to open the August 24-strike puts on TECK at $2.22 or better. These options expire on August 20, 2021. I suggest a target gain of 100% and that means the stock will need to drop to $19.56. The target is below the June low, but not nearly as low as the March low. The lower rail is already below our target price. I suggest a stop at $23.80.
-Rick Pendergraft
Instant Cash Payouts: How I Sell Put Options for Safe Passive Income
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