Stocks tried to bounce back yesterday, but the sellers didn’t make it easy. All four indices opened higher on Thursday, but all would move in to negative territory in the afternoon. Three of the four did manage to rally in to the close and post gains. The Russell rallied, but it wasn’t able to move in to positive territory and suffered a loss of 0.30%.
The Nasdaq posted the best performance with a gain of 0.27%. The S&P moved up 0.21% as the second best performer while the Dow edged up 0.17%.
[hana-code-insert name=’adsense-article’ /]Seven of the 10 sectors moved higher on Thursday.The consumer discretionary sector posted the biggest gain at 0.65%.
It was followed by the tech sector with a gain of 0.58% and the healthcare sector with a gain of 0.55%.
The energy sector suffered the biggest loss at -1.27% as oil prices continued to fall.
The financial sector dropped 0.34% as the second worst performer and the utilities sector fell 0.15% to round out the three in negative territory.
My scans produced a second straight solidly positive result on Thursday. There were 67 names on the bullish list and only three names on the bearish list.
The barometer jumped to 44 from 26.7 once these numbers were added in to the equation.
Given the bullish skew of the scans, I have another bullish trade idea for you today. Starbucks (Nasdaq: SBUX) appeared on the bullish list and it has really good fundamental ratings. The EPS rating is a 90 and the SMR rating is an A.
Starbucks has been one of the top performing stocks over the past year and over the last six months a trend channel has formed. The stock just hit the lower rail of the channel on Wednesday and moved higher yesterday. You can also see how the stock dipped below the 50-day moving average, but managed to close right on the trend line and then bounce.
Buy to open the July 75-strike calls on SBUX at $3.10 or better. These options expire on July 19. In order for these options to double the stock will need to reach $81.20. The upper rail of the channel should be up above the $81.20 level in the next month or so. I suggest a target gain of 100% with a stop loss at $75.40.
— Rick Pendergraft
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