Friday was a mixed day for stocks with two indices moving higher and two moving lower. All four came off their morning lows and rallied in the afternoon, but only the Nasdaq and S&P made it in to positive territory. The Nasdaq was the top performer with a gain of 1.29% and the S&P moved up 0.48%.
The Russell fell 0.47% as the worst performing index and the Dow dropped 0.07%.
The sector performances showed seven moving higher and three moving lower.The tech sector was the top performer with a gain of 1.26% and it was followed by the healthcare sector with a gain of 1.21%.
Those were the only two sectors that gained over 1.0%.
The financial sector was the worst performer with a loss of 1.14% and it was followed by the industrial sector with a drop of 0.62%.
The energy sector fell 0.46% as the third one to finish in the red.
My scans turned decidedly more bearish on Friday with 141 bearish signals and 14 bullish signals.
The barometer dropped to -84.5 once these results were added in to the equation and that is the lowest reading since May 1.
After going back and forth with last week’s trade ideas, I have a second straight bearish trade idea for you today. Urban Outfitters (Nasdaq: URBN) appeared on the bearish list on Friday and the company’s fundamental ratings are pretty bad. The EPS rating is a 13 and the SMR rating is a D.
Since the big selloff in February and March, the stock has had trouble moving back above the $19.20 area. This area has halted three different short-term rallies and did so again last week. In each previous case the stock retreated to the $15 area, but I look for a more violent decline this time around.
Buy to open the July 19-strike puts on URBN at $2.85 or better. These options expire on July 17. I suggest a target gain of 75% which means the stock will need to drop to $14.00 to hit our target. The stock was below $14 in April and March, so it won’t have to break to a new low. I suggest a stop at $19.20.
— Rick Pendergraft