Today I will be looking at a stock I just recently purchased after seeing its potential during today's LIVE Trading Room event with Mary Ellen McGonagle. I found one big name on my scan that looks enticing and a Gold Miner that is shaping up nicely. Remember that we have to trade in the very short-term timeframe (hours to days to a week or two). This requires constant supervision. One thing I haven't discussed is "targets". In this volatile market, I suggest you consider important resistance levels for targets and take profits as you go. I've decided on the weekly charts I will annotate possible target levels. You'll also notice that I've added the Relative Strength Index (RSI) to my daily charts. It's something I've been considering for awhile and I do find that with the high volatility of the market, the RSI is helpful. For those not familiar with the RSI, here is a link to ChartSchool. I also include ChartSchool links at the bottom of every article for those who may need more information on the indicators that I typically use.
Live Trading Room - Tuesdays/Thursdays
I'm teaming up with Mary Ellen McGonagle (MEMInvestmentResearch.com) to do regular "LIVE Trading Room" events for FREE at 11:00a EST. We've had excellent reviews on our new LIVE Trading Rooms so far and plan on continuing them Tuesdays/Thursdays 11:00a EST. The link will be sent out the day before the event, so watch your email!
Barrick Gold Corp (GOLD) - Earnings: 5/6/2020 (BMO)
Currently I'm holding GLD which is the ETF proxy for Gold. I've avoided Miners as they do swing with the market regardless of what Gold does sometimes. However, this one came up on my scan so I wanted to review it. The indicators are all in agreement that this is bullish stock. The 20/50-EMA had a "silver cross" or IT Trend Model BUY signal. The RSI is positive and above 50. The OBV is confirming the move with rising bottoms. The SCTR is healthy and of course there is the PMO BUY signal on a PMO that is not overbought. I like that you can set a reasonable stop here as well.
We a weekly PMO BUY signal currently (it won't go final until after trading on Friday). This week $20 is holding as support. The first upside target would be close to $23.
Welcome to DecisionPoint Daily Diamonds, wherein I highlight five "diamonds in the rough." These are selected from the results of my DecisionPoint scans, which search for stocks that could benefit from the trend and condition of the market. Remember, these are not recommendations to buy or sell, but are the most interesting of the stocks that surfaced in my scans. My objective is to save you the work of the initial, tedious culling process, but you need to apply your own analysis to see if these stocks pique your interest as well. There are no guaranteed winners here!
NVIDIA Corp (NVDA) - Earnings: 5/14/2020 (AMC)
Here's our big name. I will tell you that it was a "diamond" on March 3rd. Clearly not a good buy. The stop was hit pretty quickly. Now we have a reverse head and shoulders forming off the initial drop from the February top. It is a sloping neckline and it technically crossed above. Today's pullback makes this enticing and a 9% stop is doable. The PMO is on a BUY signal and notice that the 20-EMA crossed above the 50-EMA for a "silver cross" or IT Trend Model BUY signal. The SCTR remains high and although OBV lows are flat, I find that positive. Volatility increased, but volume held stead overall based on the OBV.
The weekly PMO has turned back up again (the previous turn I noted in the 3/3 Diamonds report). The last one didn't work out. The upside target would be at the all-time high around $320.
Don't forget, on Thursdays I look at reader-requested symbols, so shoot me an email at erin@decisionpoint.com. I read every email I receive and try to answer them all!
Arcus Biosciences Inc (RCUS) - Earnings: 4/30/2020 (AMC)
This is a small-cap pharma that looks interesting to me right now. We have a PMO BUY signal, strong SCTR and a confirming OBV. The RSI is in the middle of the range which is acceptable. I put a stop level at the top of the mid-February breakout around $13.
A conservative upside target would still get you an over 23% gain. The weekly PMO hasn't had time to calculate a range, but it is rising.
Teva Pharmaceutical Industries Ltd (TEVA) - Earnings: 4/30/2020 (BMO)
This is the stock I bought after our Live Trading Room today. I got in a bit higher than I wanted but I liked that I could set a reasonable stop near the January bottom. The 5-EMA crossed above the 20-EMA for a ST Trend Model BUY signal and price closed above the 50-EMA--all positive. We have a PMO BUY signal currently and an OBV that is confirming the rally. The RSI is rising out of oversold territory and the SCTR is healthy.
The very enticing part of this is the weekly chart and the possible upside targets. Just getting to major resistance at the 2020 top, will get us a 45% gain. The weekly PMO has turned up above the zero line.
Vertex Pharmaceuticals Inc (VRTX) - Earnings: 4/28/2020 (AMC)
Honestly this is one of the more bullish charts I've seen during this virus disaster. The PMO has a nice BUY signal and is rapidly rising. The OBV is confirming the rally. We have an IT Trend Model BUY signal with the positive 20/50-EMA crossover. It really backed off its highs for the day which could give us an advantage for an entry. The SCTR is strong and the RSI is rising steadily.
The weekly PMO is rising toward a BUY signal. It is a little disconcerting to see price close beneath that prior resistance area, but like I said, this could make it a good entry without chasing. In our Trading Room, we have found that a 5-minute chart with 5-SMA and 8-SMA is a great guide to finding key entry levels.
Current Market Outlook:
Market Environment: It is important to consider the odds for success. The Silver Cross Index measures the percentage of stocks on IT Trend Model BUY signals (20-EMA > 50-EMA), while the Golden Cross Index measures the percentage of stocks on LT Trend Model BUY signals (50-EMA > 200-EMA). Don't forget that as a "Diamonds" member, you have access to our GCI/SCI curated ChartList on DecisionPoint.com. You'll find it under "Members Only" links on the left side on the Blogs and Links Page. Here are the current percentages on the Silver and Golden Cross Indexes:
Diamond Index:
- Diamond Scan Results: 1
- Diamond Dog Scan Results: 1
- Diamond Bull/Bear Ratio: 1.00
For a more comprehensive review of current market conditions as well as analysis of Dollar, Gold, Oil and Bonds, subscribe to the DecisionPoint Alert! For a LIMITED TIME you can get a coupon code that will give you a discount for bundling your Diamonds subscription with the DecisionPoint Alert! Contact support@decisionpoint.com for more details.
Full Disclosure: I do not own any of the stocks above. I'm currently 75% in cash.
Erin Swenlin will be presenting at the The MoneyShow Las Vegas August 16 - 20 at Bally's/Paris Resort! You'll have an opportunity to meet Erin and discuss the latest DecisionPoint news and Diamond Scans. Claim your FREE pass here! You can watch online with this pass too!! There will be online events held in May and when I have more information I'll let you know.
Watch the latest episode of DecisionPoint with Carl & Erin Swenlin LIVE on Mondays 5:00p EST or on the StockCharts TV YouTube channel here!
Technical Analysis is a windsock, not a crystal ball.
Happy Charting!
- Erin
erinh@stockcharts.com
NOTE: The stocks reported herein are from mechanical trading model scans that are based upon moving average relationships, momentum and volume. DecisionPoint analysis is then applied to get five selections from the scans. The selections given should prompt readers to do a chart review using their own analysis process. This letter is not a call for a specific action to buy, sell or short any of the stocks provided. There are NO sure things or guaranteed returns on the daily selection of "diamonds in the rough."
Helpful DecisionPoint Links:
DecisionPoint Shared ChartList and DecisionPoint Chart Gallery
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
For more links, go to DecisionPoint.com!