The week got off to a rough start with all four indices opening in the red and the losses worsened as the morning went on. Fortunately they did turn higher in the afternoon and three of the four were able to finish with much smaller losses. The Russell managed to move in to positive territory and closed with a gain of 0.11%.
The Nasdaq took the worst loss at 0.38%, but it was down over 1.0% at its low. The S&P fell 0.25% and the Dow dropped 0.16%.
Seven of the 10 sectors moved lower on the day while three moved higher. Communication services stocks took the biggest loss with the sector falling 0.79%. The tech sector was close behind with a drop of 0.74%.
The energy sector jumped 2.32% to lead the way on Monday and it was followed by the materials sector gained 0.88% for second place. The financial sector moved up 0.18% as the third sector to finish in the black.
My scans remained decidedly positive on Monday with 92 bullish signals and only two bearish signals.
The barometer continued to climb and came in at 69.2 last night, up from 38.3 on Friday. This is the highest reading for the barometer since early February.
There were a number of stocks on the bullish list that got my attention for both the fundamental scores and the charts, but one stood out above all the rest. HP Inc. (NYSE: HPQ) was on the list and has an EPS rating of 82, but it doesn’t have an SMR rating due to not having an ROE. I did run the stock through the Tickeron Fundamental Screener, the AI platform I use, and it gets positive marks in five out of six categories.
The chart for HP was extremely impressive with a really tight trend channel going back to the end of October. The stock just hit the lower rail of the channel and support at the 50-day moving average. We also see that the stochastic indicators were the lowest they have been since October and they made a bullish crossover last night.
Buy to open the July 31-strike calls on HPQ at $3.10 or better. These options expire on July 16, 2021. I suggest a target gain of 100% and that means the stock will need to reach $37.20. That means the stock will need to reach a new high, but based on the channel the upper rail will be above that level in the next two to three weeks. I suggest a stop at $31.25.
— Rick Pendergraft
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