After selling off on Wednesday and Thursday, stocks bounced back on Friday. All four of the main indices moved higher on the day, but it was the Russell that really stood out with a gain of 0.85%. The gains on the other three were much smaller. The Dow gained 0.37%, the S&P was up 0.14%, and the Nasdaq advanced 0.11%.
Seven of the 10 sectors moved higher on Friday, but none of them moved up over one percent. The financial sector led the way with a gain of 0.79% and it was followed by the materials sector with a gain of 0.56%.
[hana-code-insert name=’adsense-article’ /]The consumer staples sector was the worst performer with a loss of 0.36%.The utilities sector fell 0.15% and the communication services sector joined those two in negative territory with a loss of 0.02%.
My scans produced a bullishly skewed result for a fourth straight night with 23 names on the bullish list and 12 on the bearish list.
The barometer inched up ever so slightly, moving from 15.2 to 15.7.
Of the 35 names on the two lists, there weren’t very many that really got my attention. One that did was the iShares MSCI Germany ETF (NYSE: EWG). The ETF appeared on the bullish list and there was a pattern in the chart that I liked.
The fund has been trending higher with the confines of an upwardly sloped trend channel. It moved out of the channel on Thursday with a gap lower, but it bounced back up and back in to the channel on Friday.
Buy to open the July 26-strike calls on EWG at $1.90 or better. These options expire on July 19. In order for these options to double the fund will need to reach $29.80. The upper rail of the channel should be above that price level in a few weeks. I suggest a target gain of 100% with a stop at $27.00.
— Rick Pendergraft
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