After the November employment report blew out expectations, stocks soared higher on Friday. The report showed 266,000 new jobs added compared to the 182,000 estimate. October’s numbers were also revised upward.
All four of the main indices experienced significant gains. The Dow led the way with a gain of 1.22% while the Russell gained 1.18% as the second best performer. The Nasdaq tacked on 1.0% and the S&P trailed the others with a gain of 0.91%.
[hana-code-insert name=’adsense-article’ /]The risk-on day led to nine of the 10 sectors moving higher with only the utilities sector losing ground with a drop of 0.30%.The energy sector led five sectors that posted gains of 1.0% or higher with a gain of 1.91%.
The financial sector had the second best gain at 1.34%.
My scans produced a third straight positive result with 53 names on the bullish list and only six names on the bearish list.
The barometer jumped from 8.3 to 32.9 as a result and that is the highest reading for it since mid-October.
With the results of the scans being so lopsided, today’s trade idea is yet another bullish one. Intel (Nasdaq: INCT) appeared on the bullish list on Friday and the company has really good fundamental ratings. The company scores a 79 on its EPS rating and an A on the SMR rating scale.
After a tumble over the summer, Intel has been trending higher since late August. A trend channel has formed with the lows from August and October forming the lower rail. The stock touched that lower rail last week before bouncing back. We also see that the daily stochastic readings are in oversold territory and just made a bullish crossover.
Buy to open the January 55-strike calls on INTC at $2.85 or better. These options expire on January 17. In order for these options to double the stock will need to reach $60.70. The stock will have to break to a new high to hit the target, but based on recent bullish crossovers from the stochastic readings and the bounces off the lower rail, I think the stock can get there. I suggest a target gain of 100% with a stop at $55.50.
— Rick Pendergraft
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