Thursday proved to be a solid day for stocks as all four indices moved higher and were in positive territory throughout the day. The Russell led the way with a gain of 0.68% and it was followed by the Dow with a gain of 0.44%.
The S&P was right behind the Dow with a rally of 0.42%. The Nasdaq experienced the smallest gain at 0.11%.
Nine of the 10 main sectors moved higher on the day with only the communication services sector moving lower with a drop of 1.08%. The healthcare sector was the second worst performer, but that was with a gain of 0.24%.
The consumer discretionary sector was the top performer on the day with a gain of 1.13%. It was followed closely by the materials sector which gained 1.10% and the financial sector which rallied 1.07%.
My scans flipped back to positive last night, but by the smallest margin possible. There were 27 bullish signals and 26 bearish signals.
The barometer moved up slightly once the results were added to the calculation, moving from -26.2 to -17.7.
With the balanced results from last night’s scans, I found a couple of stocks on each list where I liked the setups. Ultimately I like the combination of factors I saw with Academy Sports and Outdoors (Nasdaq: ASO). The company was on the bullish list and it has great fundamental ratings. The EPS rating is 99 and the SMR rating is an A—you can’t get higher than those.
In addition to the strong fundamentals, we see that the stock has been trending higher since December with a trend channel defining the cycles over the last six months or so. The stock is down near the lower rail currently and it looks like it may have put in a double-bottom in the last few weeks.
Buy to open the September 35-strike calls on ASO at $3.30 or better. These options expire on September 17, 2021. I suggest a target gain of 100% and that means the stock will need to reach $41.60. The target is below the high we saw in June and well below the upper rail of the channel. I suggest a stop at $34.40.
— Rick Pendergraft
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