The week has definitely started with a "bang" as Monday saw more rally and today the market crashed. I didn't expect to find much in my scans, but I actually had some results. One stock in particular interested me so I decided to follow-up by diving into the industry group on the Industry Summary. Plenty of stocks showed the characteristics I look for in "Diamonds in the Rough". In fact, I ended up ditching the one from my scans (EGLE) because its brethren had stronger weekly charts.
The industry group, if you haven't guessed, is Marine Transportation. That group has been quietly outperforming. It was encouraging to see many of these stocks outperforming the market.
I will be on "Trader's Corner" on Thursday to discuss the strategy of using scans combined with industry group analysis. This is exactly what I did today. Recordings will be sent to registrants if you can't attend. And yes, get ready to opt-out of the emails that will likely come from registering, but it is a way you can support my work. It is always appreciated. Here is the registration link.
Continue to be careful and vigilant. We're likely in for some more chop and churn. This market is not for the faint of heart.
Good Luck & Good Trading!
Today's "Diamonds in the Rough": DHT, NAT and TNP.
"Runners-up": INST, MAXN, NOVA, PYCR, RGA, VC, COLL, EGLE, SBLK, STNG, INSW and OSG.
RECORDING LINK (9/9/2022):
Topic: DecisionPoint Diamond Mine (9/9/2022) LIVE Trading Room
Start Time: Sept 9, 2022 09:00 AM
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When: Sep 16, 2022 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (9/16/2022) LIVE Trading Room
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Here is the Monday 9/12 recording:
Welcome to DecisionPoint Diamonds, wherein I highlight ten "Diamonds in the Rough" per week. 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!
"Predefined Scans Triggered" are taken from StockCharts.com using the "Symbol Summary" option instead of a "SharpChart" on the workbench.
DHT Holdings Inc. (DHT)
EARNINGS: 10/31/2022 (AMC)
DHT Holdings, Inc. engages in the operation of a fleet of crude oil tankers. It operates through its integrated management companies in Monaco, Singapore, and Oslo, Norway. The company was founded in 2005 and is headquartered in Hamilton, Bermuda.
Predefined Scans Triggered: P&F Double Top Breakout and P&F Bullish Triangle.
DHT is unchanged in after hours trading. I covered DHT on June 9th 2020 (position is closed). I was impressed with this chart given the very bullish configuration of the EMAs and the breakout last week. This breakout came from a bull flag formation. The minimum upside target of the flag would be around $10. Based on the monthly chart (not included), that is an excellent place to look for price to go.
The RSI is falling, but is still positive. The PMO triggered a crossover BUY signal today. The OBV broke out with price and is thus confirming the breakout. Stochastics just moved above 80 and relative strength is excellent. The group is on fire and DHT is a top performer in that group. The stop is set right around the 20-day EMA at $7.96.
Last quarter DHT took off. It had already seen a weekly PMO crossover BUY signal. The weekly RSI and weekly PMO are on the overbought side, but given the strength of the current rally, it makes sense. The SCTR is a strong 97.0%. Look at $10.00 for your upside target which would be a gain of about 18%.
Nordic American Tanker Shipping Ltd. (NAT)
EARNINGS: 11/25/2022 (BMO)
Nordic American Tankers Ltd. operates as an international tanker company. It owns and operates Suezmax crude oil tankers. The company was founded by Herbjorn Hansson on June 12, 1995 and is headquartered in Hamilton, Bermuda.
Predefined Scans Triggered: None.
NAT is unchanged in after hours trading. This is a low priced stock so be careful with your position size. The RSI is positive and not yet overbought. The PMO just had a crossover BUY signal and is still rising strongly. Volume has been coming in strong based on the rise in the OBV. Stochastics are above 80 and oscillating. Relative strength is outstanding. The stop would be over 11% had I set it below support, so I made it skinnier at 8.2% or around $2.96.
We have a rounded price bottom that could be considered a loose reverse head and shoulders with the head being the first quarter 2022 low. It appears it is beginning to breakout of the pattern. The pattern suggests and upside target around $5, but I'd be less aggressive and look for at 17% to 18% upside target. The weekly RSI is positive and not overbought. The weekly PMO bottomed above the signal line and remains on a crossover BUY signal. It isn't overbought. The SCTR is a very strong 98.2%.
Tsakos Energy Navigation Ltd. (TNP)
EARNINGS: 9/14/2022 (BMO) ** REPORTS EARNINGS TOMORROW **
Tsakos Energy Navigation Ltd. engages in the provision of seaborne crude oil and petroleum product transportation services. Its activities include the operation of crude tankers, product tankers, and liquefied natural gas carriers. The company was founded by Nikolas P. Tsakos and Michael Gordon Jolliffee in July 1993 and is headquartered in Athens, Greece.
Predefined Scans Triggered: P&F Ascending Triple Top Breakout and P&F Double Bottom Breakout.
TNP is down -0.54% in after hours trading. It reports earnings tomorrow, so don't set any overnight market orders. It's better to see how it opens. I'm taking a bit of a chance adding it. I definitely prefer to wait, but since tomorrow is ETF Day, I wanted to bring it to your attention now. The breakout from a bull flag has been nearly vertical. It is due for a pullback and tomorrow--another reason to wait for the open. Today saw a bullish engulfing candlestick. This rally has pushed the RSI into overbought territory, but based on March and April, it can move much higher. Additionally, late July and August showed us that it can remain overbought for some time. The volume is pouring in and Stochastics are above 80. Relative strength is steadily rising. The one problem is that the PMO is very overbought. It is on a BUY signal and rising though. The stop was difficult to set based on the strength of the rally on Friday. I decided to set it somewhat arbitrarily just above $17 at 7.8%.
This week TNP is breaking out above resistance at the top of the trading channel in 2018. We have overbought issues on the weekly chart. The weekly RSI is rising, but is overbought. The weekly PMO is on a BUY signal and rising strongly, but is definitely overbought. The SCTR is very excellent at 99.4%.
Don't forget, on Thursdays I look at reader-requested symbols, click HERE to send me an email. I read every email I receive and try to answer them all!
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)
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:
Full Disclosure: I am 30% exposed.
I'm required to disclose if I currently own a stock I mention and/or may buy/short it within the next 72 hours.
"Technical Analysis is a windsock, not a crystal ball." - Carl Swenlin
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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."
Regarding BUY/SELL Signals: The signal status reported herein is based upon mechanical trading model signals and crossovers. They define the implied bias of the price index/stock based upon moving average relationships and momentum, but they do not necessarily call for a specific action. They are information flags that should prompt chart review. Further, they do not call for continuous buying or selling during the life of the signal. For example, a BUY signal will probably (but not necessarily) return the best results if action is taken soon after the signal is generated. Additional opportunities for buying may be found as price zigzags higher, but the trader must look for optimum entry points. Conversely, exit points to preserve gains (or minimize losses) may be evident before the model mechanically closes the signal.
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