Stocks rose again on Friday and that put the S&P at a new all-time high along with the Dow and the Nasdaq Composite. The indices ended up gaining ground for the week as well and for the S&P that’s three out of the last four weeks where it has moved higher.
The Russell led the way on Friday with a gain of 2.37% and it was followed by the S&P which gained 0.88%. The Dow moved up 0.83% and the Nasdaq tacked on 0.70%.
Nine of the 10 sectors moved higher on Friday with only the utilities sector losing ground with a drop of 1.0%.The energy sector was the top performer with a jump of 5.45%.
Five other sectors gained more than 1.0% with the materials sector gaining 2.02% as the second best performer.
My scans turned positive on Friday, but not by much.
There were eight bullish signals and seven bearish signals.
The barometer continued its climb toward positive territory and came in with a reading of -15.6 on Friday, up from -35.8.
I have another bullish trade idea for you today. Carrier Global (NYSE: CARR) appeared on the bullish list and has mixed fundamental readings. The EPS rating is only a 41 and below average, but the SMR rating is a B and above average. This trade idea is driven by the chart more than anything.
Carrier started trading right at the end of the first quarter drop in the overall market and it has been trending higher ever since. A trend channel formed almost immediately and it has helped guide the stock higher over the last nine months. The stock hit the lower rail of the channel this past week and looks primed for its next move higher.
Buy to open the January 35-strike calls on CARR at $3.60 or better. These options expire on January 15, 2021. I suggest a target gain of 100% and that means the stock will need to reach $42.20. The stock will need to break above the high from November to hit our target, but the upper rail of the channel is already above the $42 level. I recommend a stop at $35.75.
— Rick Pendergraft
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