The three-day winning streak for the S&P came to a halt on Tuesday as the index fell and so did the other three main indices. Stocks were in the red almost all day, but the selling intensified in the closing minutes.
The S&P suffered the biggest loss of the four at 0.79% and it was followed by the Nasdaq which fell 0.68%. The Dow and Russell suffered identical drops of 0.66%.
Nine of the 10 main sectors moved lower on the day. The consumer discretionary sector managed a small gain of 0.04% and that was largely due to a 4.4% jump in Home Depot after its earnings report. Utilities were the second best performer with a loss of 0.15%.
[hana-code-insert name=’adsense-article’ /]The financial sector took the worst hit with a decline of 1.38%.Materials (-1.17%) and consumer staples (-1.10%) made it three sectors with losses greater than one percent.
My scans turned in a fourth straight positively skewed result on Tuesday, but the difference between the two lists was considerably smaller than the last few days.
There were 27 names on the bullish list and six on the bearish list.
The barometer dropped once these results were added in to the equation, falling from 109.9 to 88.7.
That is still a relatively high reading for the barometer.
I was hesitant to make a fourth straight bullish trade idea, but the combination of fundamentals, the chart, and the oscillators was too much for me to pass up. Trade Desk (Nasdaq: TTD) appeared on the bullish list last night and the fundamental ratings are really strong with an EPS rating of 99 and an SMR rating of an A.
We see the trend channel on the chart over the last eight months, but the stock didn’t quite reach the lower rail of the channel. What got my attention just as much were the daily stochastic readings being in oversold territory and making a bullish crossover. The three previous instances of oversold stochastic readings have produced gains of 24.3%, 29.2%, and 44.6% within the next five weeks. For these options to double the stock needs to rally almost 20%.
Buy to open the September Week 4 250-strike calls on TTD at $18.00 or better. These options expire on September 27. In order for these options to double the stock will need to reach $286.00. This is a higher priced option than usual, but given the previous rallies after bullish stochastic crossovers, I think the risk/reward relationship is worth it. I suggest a target gain of 100% with a stop at $235.00.
— Rick Pendergraft
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