Monday proved to be a bit of an odd day. The Nasdaq and Russell opened in positive territory while the Dow and S&P opened with small losses. The Nasdaq would remain in positive territory for most of the day, the Russell fell in to negative territory early and remained there the rest of the day.
The Dow and S&P were in negative territory for most of the day, but would rally to close with small gains at the end of the day.
[hana-code-insert name=’adsense-article’ /]As far as the numbers go, the Nasdaq gained 0.17%, the Dow tacked on 0.10%, and the S&P edged up 0.02%.The Russell dropped by 0.52%.
Seven of the 10 main sectors moved higher on the day, but none of them gained more than 0.5%.
The utilities sector moved up 0.40% and that was the top performance on the day.
The tech sector gained 0.33% and that was good enough for second.
The energy sector suffered the worst loss at 0.90% and it was followed by the financial sector with a loss of 0.56%. The industrial sector dropped 0.40% and was the third sector that finished in the red on the day.
My scans were almost perfectly balanced last night with 21 names on the bullish list and 22 on the bearish list.
The barometer continued to climb from last week’s low readings and finished with a reading of -3.9 after a reading of -12.5 on Friday.
Over the last four trading days I have gone back and forth with a bullish trade idea and then a bearish trade idea. In sticking with that pattern, today’s trade idea is a bearish one on Schlumberger (NYSE: SLB). The company’s fundamentals are pretty bad with an EPS rating of an 18 and an SMR rating of a D.
The weekly chart showed the downward trend better than the daily chart. We see that there is a downward sloped trend line that connects the highs from 2018 with the high from April. The stock is just below that trend line at this time and it is in overbought territory on the daily chart.
Buy to open the August Week 5 42.50-strike puts on SLB at $2.75 or better. These options expire on August 30. In order for these options to double the stock will need to drop to $37.00. The stock dropped below $35 in May so it won’t have to break below that most recent low to double. I suggest a target gain of 100% with a stop at $41.60.
— Rick Pendergraft
[hana-code-insert name=’MMPress’ /]