Stocks came under some selling pressure on Tuesday and all four of the main indices ended up finishing lower. All four were in positive territory at some point during the day, but not a one of them could close the day in the black.
The Russell was the worst performer of the bunch with a loss of 0.62%. The S&P dropped 0.15% and the Dow and Nasdaq had matching losses of 0.07%.
On the sector front, three managed to post gains while the other seven declined. The communication services sector led the way with a gain of 1.36%. The consumer staples sector moved up 0.91% and the tech sector eked out a gain of 0.04%.
The energy sector was the worst performer for a second straight day and this time it was a loss of 2.14%. The materials sector dropped 1.38% and the utilities sector fell 1.05%. Those were the only three sectors that lost more than 1.0%.
My scans were negatively skewed again last night, but not as bad as the night before. There were 54 bearish signals and 16 bullish signals.
The barometer fell a little deeper in to negative territory with a drop to -41.3.
After two bullish trade ideas in a row, I have a bearish one for you today. Physicians Realty Trust (NYSE: DOC) appeared on the bearish list last night, but its fundamental ratings aren’t all that bad. Of course that means the idea is driven by the chart. As for the fundamental ratings, the EPS rating is an 88 and the SMR rating is a B.
The chart shows how the stock has spent the better part of the last eight months trading between $16.30 and $18.50. The stock is up near the upper end of the range and it is tremendously overbought based on the daily stochastic indicators. I look for the range to remain in place and for the stock to drop back down to the lower end of the range over the next month.
Buy to open the March 20-strike puts on DOC at $2.05 or better. These options expire on March 19, 2021. I suggest a target gain of 75% and that means the stock will need to drop to $16.40. The stock dropped below that level in September and October. I recommend a stop at $19.00.
— Rick Pendergraft
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