Stocks moved higher again on Tuesday and for the S&P, making it three straight days of gains and it has moved higher in six of the last seven trading sessions. The Dow was the only one of the four that was in positive territory all day and the Nasdaq spent the most time in negative territory.
At the end of the day it was the Dow that led the way with a gain of 1.05%. The Russell logged the second best gain at 0.91%. The S&P moved up 0.82% and the Nasdaq ended up tacking on 0.59%.
All 10 main sectors moved higher on Tuesday, but it was the energy sector that stood out with a gain of 2.79%.The materials sector jumped 1.81% as the second best performer and the industrial sector moved up 1.3% to give us three sectors that gained over 1.0%.
Consumer staples experienced the smallest gain at 0.27%.
The communication services sector only moved up 0.4% and that was the second smallest gain.
My scans saw both the bullish and bearish lists fall in terms of signals. There was only one bullish signal and there were 17 bearish signals.
The barometer increased from -84 to -60.8 once these results were added in to the equation, but it remains solidly in negative territory.
Despite the fact that there was only one stock on the bullish list, I liked the setup for the stock. That stock is HUYA (NYSE: HUYA) and the company gets a 72 on the EPS rating and an A on the SMR grading scale. I suggested a bearish play on HUYA back on May 21 as the stock had hit the upper rail of a downward sloped trend channel. It fell to the $15 area and appears to have found support there.
We see the downward sloped trend channel that was in play when I recommended the bearish position and how the stock has used the $14.50 to $15 range as support on several occasions since the March low. The stochastic readings hit oversold territory and made a bullish crossover last night and the stock moved back above its 50-day moving average.
Buy to open the July 15-strike calls on HUYA at $2.40 or better. These options expire on July 17. I suggest a target gain of 75% and that means the stock will need to reach $19.20. The upper rail of the channel is up near $19.75 now so it won’t have to break above that trend line. I suggest a stop at $ 15.00.
— Rick Pendergraft
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