Stocks were mixed on Tuesday and that led to split results from the four indices. The Russell moved up 0.37% and the Nasdaq gained 0.24% while the S&P fell 0.06% and the Dow dropped 0.36%.
The sectors were slightly skewed to the downside with six moving lower and four moving higher. The biggest move of the day was a decline of 1.48% by the energy sector and that was due to a 3.28% drop in oil prices. The consumer discretionary sector dropped 1.08% and was the only other sector to lose more than 1%.
[hana-code-insert name=’adsense-article’ /]On the plus side, the healthcare sector gained 0.67% to lead the way while the tech sector edged up 0.19%.My scans moved a little further to bearish side on Tuesday with 42 names on the bearish list and 11 on the bullish list.
The barometer dropped from -0.9 to -13.4 once these results were added in to the equation.
After four straight bullish trade ideas, I have a bearish trade idea for you today.
Mondelez International (Nasdaq: MDLZ) appeared on the bearish list last night and it has mixed fundamental ratings. The EPS rating is slightly above average at 68, but the SMR rating is average with a C rating.
We see on the chart that the stock has been trending lower over the last month and a half with a trend channel forming. The stock has just hit the upper rail of the channel and looks to be turning lower. The stochastic readings were in overbought territory and made a bearish crossover last night.
Buy to open the January 55-strike puts on MDLZ at $2.85 or better. These options expire on January 17. In order for these options to double the stock will need to drop to $49.30. The stock will need to drop to a new six month low for our target to be hit, but I believe it can get there. I suggest a target gain of 100% with a stop at $53.50.
— Rick Pendergraft
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