REITs were showing some strength yesterday, but today they made a big splash in my various scan results. I investigated further and looked at the XLRE sector chart. XLRE broke out on Monday and while it pulled back today, it held support. It is one of the few sectors that has a rising PMO. The participation is waning somewhat but overall the numbers would support a bounce here. Given this is a more defensive area of the market, I believe this could be a way to play defense in your portfolio. Be careful overall, the market is at a crossroads. It can hold the rising trend or lose it. I don't want to add positions until the market picks a direction.
It must be time for Spring Cleaning as the majority of these stocks are storage companies.
Today's "Diamonds in the Rough" are: CUBE, LSI, PSA, ROIC and SITC.
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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!
EARNINGS: 2/18/2021 (AMC)
CubeSmart is a self-managed and self-administered real estate investment trust with its operations conducted solely through CubeSmart LP and its subsidiaries. It owns, operates, develops, manages, and acquires self-storage properties. The company was founded in July 2004 and is headquartered in Malvern, PA.
CUBE is down -1.52% in after hours trading. It has hit overhead resistance so there is a good chance we will see a pause or pullback here, especially if the market loses its rising trend. The RSI is positive, getting slightly overbought so be careful. The PMO is rising nicely and is not overbought. The OBV is confirming the interest in this stock, although it broke to a new high and price hasn't (reverse divergence). I like the chart, I just don't like the market.
CUBE is hitting all-time highs and the weekly PMO has triggered a new crossover BUY signal. The RSI is positive and not overbought yet. The OBV looks good.
Life Storage, Inc. (LSI)
EARNINGS: 2/25/2021 (AMC)
Life Storage, Inc. is a real estate investment trust, which engages in the acquisition, ownership, and management of self-storage properties. It offers commercial, vehicle, and wine storage services. The company was founded by Robert J. Attea, David L. Rogers, Kenneth F. Myszka, and Charles E. Lannon in 1982 and is headquartered in Buffalo, NY.
LSI is down -0.76% in after hours trading. Despite today's pullback, the short-term rising trend has not been broken. Should the decline in after hours trading translate to tomorrow, it could spoil the chart, but I would still keep it on the watch list. We could see a bounce at support should it decide to test it or the 20-EMA. The RSI is positive and the PMO is rising. The PMO was damaged a bit on today's decline, but it is rising and isn't quite overbought.
LSI is logging new all-time highs. The RSI is positive and not overbought. The PMO bottomed above its signal line and is still rising.
Public Storage, Inc. (PSA)
EARNINGS: 2/23/2021 (AMC)
Public Storage operates as a real estate investment trust. The firm engages in acquiring, developing, owning and operating self-storage facilities. It operates through the following segments: Self-storage Operations, Ancillary Operations, Investment in PS Business Parks and Investment in Shurgard. The Self-storage Operations segment reflects the rental operations from all self-storage facilities. The Ancillary Operations segment deals with the sale of merchandise and reinsurance of policies against losses to goods stored by self-storage tenants, activities which are incidental to the primary self-storage rental activities. The Investment in PS Business Parks segment includes commercial properties, primarily multi-tenant flex, office, and industrial parks. The Investment in Shurgard segment owns self-storage facilities located in seven countries in Western Europe operated under the Shurgard brand name. The company was founded by Bradley Wayne Hughes, Sr. and Kenneth Q. Volk, Jr. in 1972 and is headquartered in Glendale, CA.
PSA is unchanged in after hours trading. I covered it recently in the December 15th Diamonds Report. It is up +1.28% since then. It had a tight stop of 5.4% at 212.50. The stop was hit intraday at the beginning of January, but it closed above. There is a nice falling wedge pattern and we may be getting a breakout soon. The RSI is just now reaching positive territory. The PMO is now above the zero line and has recently triggered a crossover BUY signal. I'm keeping the stop at 212.50.
The weekly PMO is decelerating and the RSI is positive. Upside potential isn't that exciting, but no reason it couldn't breakout if it got there.
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Retail Opportunity Investment Corp. (ROIC)
EARNINGS: 2/17/2021 (AMC)
Retail Opportunity Investments Corp. operates as a self-managed real estate investment trust. The company engages in the ownership, management, and redevelopment of retail real estate properties. It specializes in the acquisition, ownership and management of grocery-anchored shopping centers located in densely-populated, metropolitan markets across the West Coast. The company was founded on July 10, 2007 and is headquartered in San Diego, CA.
Hmmmmm, I just checked at ROIC is down -5.53% in after hours trading. It's a little late for me to switch it out for another and it could recover tomorrow. Just don't put an overnight order in. Currently price is holding above the 20-EMA. It is struggling with overhead resistance, but the PMO is very favorable (one of the reasons I picked this one). The stop is set below the 50-EMA. It will be interesting to see how this one shakes out tomorrow.
I really liked the weekly chart because it sports a bull flag that has executed. The PMO is still rising and the RSI is positive. In the longer term, we can see that $14.50 is strong overhead resistance, but it is closing above it currently.
SITE Centers Corp. (SITC)
EARNINGS: 2/11/2021 (BMO)
SITE Centers Corp. is a real estate investment trust, which engages in the acquisition, development, lease, and management of shopping centers. It operates through the Shopping Centers and Loan Investments segments. The company was founded in 1965 and is headquartered in Beachwood, OH.
This one came up in my scans yesterday but I wasn't enamored of the overbought RSI reading. That has changed with the decline today that tested the 5-EMA. The RSI is positive now and not overbought. The PMO is on a BUY signal and rising nicely. The OBV is confirming the rally with rising bottoms. I set the stop just above the December trading range.
We do have an overbought PMO, but it is rising strongly. The RSI is positive but getting a little overbought. I set upside potential to the bull market top.
Full Disclosure: I'm about 80% invested and 20% is in 'cash', meaning in money markets and readily available to trade with. BLL was sold today. My stops are in place in case today was only the beginning of a sizable market decline.
Current Market Outlook:
Market Environment: It is important to consider the odds for success by assessing the market tides. The following chart uses different methodologies for objectively showing the depth and trend of participation for intermediate- and long-term time frames.
- The Silver Cross Index (SCI) shows the percentage of SPX stocks on IT Trend Model BUY signals (20-EMA > 50-EMA)
- The Golden Cross Index (GCI) shows the percentage of SPX stocks on LT Trend Model BUY signals (50-EMA > 200-EMA)
- The Bullish Percent Index (BPI) shows the percentage of SPX stocks on Point & Figure BUY signals.
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 is the current chart:
- Diamond Scan Results: 1
- Diamond Dog Scan Results: 4
- Diamond Bull/Bear Ratio: 0.25
I'm in the process of trying to plot the Diamond Index, but with time at a premium, it is on the back burner.
Technical Analysis is a windsock, not a crystal ball.
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."
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