Stocks reversed course on Thursday with three out of the four main indices moving higher. The Russell led the way with a gain of 1.89%. The Nasdaq moved up 0.73% and the S&P tacked on 0.38%. The Dow was the lone index in the red with a drop of 0.04%.
We saw similar numbers in the sector performance with nine of the 10 moving higher. The energy sector fell 0.82% and it was the lone sector to lose ground.
[hana-code-insert name=’adsense-article’ /]As for the gainers, the financial sector led the way with a gain of 0.96%.The communication services sector and the healthcare sector each moved up 0.70% in a tie for the second best performance.
My scans flipped around on Thursday with 34 names on the bullish list and only two on the bearish list.
This is the first time in 14 trading days that we have seen a bullishly skewed result.
The barometer jumped from -68.1 to -24.4 once these results were added in to the equation.
This is the 14th straight day the barometer has been in negative territory.
I have a second straight bullish trade idea for you today and it is on J.P. Morgan Chase (NYSE: JPM). The stock appeared on my bullish list and it has strong fundamental ratings. The EPS rating is an 85 and the SMR rating is an A.
The chart shows how a trend channel has formed from the low in December. The lower rail connects that low with the lows from March and May. The stock has just hit the lower rail again and the stochastic readings had dipped in to oversold territory. The indicators made a bullish crossover yesterday.
Buy to open the August 105-strike calls on JPM at $5.40 or better. These options expire on August 16. In order for these options to double the stock will need to reach $115.80. That level is well below the recent high so the stock won’t have to break to a new high. I suggest a target gain of 100% with a stop at $107.50.
— Rick Pendergraft
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