It's Reader Request Day. Besides taking requests, I like to answer mailbag questions. I don't always have them, but when I do, I always try to answer them.
On 5-minute chart, PMO Crossover BUY and strong RSI for several hours then PMO crossover decline (clear decline) and RSI declined but price stayed the same for a couple of hours- no decline ? What does that mean?
This answer works for any timeframe PMO:
"If you have a stock on the 5-minute chart (or any timeframe) where the PMO declines and RSI declines or goes negative, but price stays about the same, it tells you the stock has internal strength in that timeframe. Price won't always decline when the PMO does. If the rising trend is steady, the PMO will flatten and sometimes turn over. That's a sign of internal strength. This is why PMO "Surges" above the signal line are so bullish. Surge = PMO bottom above the signal line.
As far as the RSI, it measures where price currently lies within a 14-period trading range. If price is flat, the RSI will sometimes decline or flatten. It will sometimes decline if the 14-period range shrinks. The more you watch these indicators, the more familiar you will become with them."
For more information on the PMO and RSI, you can use the links at the bottom of any of our blogs.
Reader Requests were plentiful enough that I was able to find four requested stocks to present. However, I did run my Surge Scan today and have listed the ones out of those results that I found interesting.
The new Scan Alert service is still in the works. We're working on code that will organize the lists appropriately as the current code doesn't support that. We hope to have it ready for Beta testing sometime next month. I have a handful of Beta testers. If you'd like to try out for free for two weeks and send me your thoughts, I'll offer the new service to you at a discount.
Good Luck & Good Trading,
Today's "Diamonds in the Rough": CSCO, EQT, GNW and WDAY.
Other Requests: KRYS, IBRX, LSPD, ACLS, IGV, IOT, SMAR and TPR.
Surge Scan Results: BMI, CMCSA, FICO, INGR and POOL.
** JULY VACATION **
I will be in Europe 7/14 - 7/27 so there will not be any Diamonds reports or trading rooms during that time. All subscribers with active subscriptions on 7/27 will be compensated with two weeks added to their renewal date.
RECORDING LINK (5/12/2023):
Topic: DecisionPoint Diamond Mine (5/12/2023) LIVE Trading Room
REGISTRATION for 5/19/2023:
When: May 19, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (5/19/2023) LIVE Trading Room
Register in advance for this webinar HERE
After registering, you will receive a confirmation email containing information about joining the webinar.
Here is the last recording (5/15):
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.
Stop levels are all rounded down.
Cisco Systems, Inc. (CSCO)
EARNINGS: 5/17/2023 - ** Reported Yesterday **
Cisco Systems, Inc. engages in the design, manufacture, and sale of Internet Protocol-based networking products and services related to the communications and information technology industry. The firm operates through the following geographical segments: the Americas, EMEA, and APJC. Its products include the following categories: Switches, Routers, Wireless, Network Management Interfaces and Modules, Optical Networking, Access Points, Outdoor and Industrial Access Points, Next-Generation Firewalls, Advanced Malware Protection, VPN Security Clients, Email, and Web Security. The company was founded by Sandra Lerner and Leonard Bosack on December 10, 1984 and is headquartered in San Jose, CA.
Predefined Scans Triggered: Improving Chaikin Money Flow, Parabolic SAR Sell Signals, Moved Above Upper Bollinger Band, Moved Above Upper Price Channel and P&F Double Bottom Breakout.
CSCO is unchanged in after hours trading. This was a runner-up on Tuesday. Today it formed a big bullish engulfing candlestick. The indicators were already looking fairly good on Tuesday and now they have matured into an even more bullish configuration. The RSI is positive and rising. There is a new PMO Crossover BUY Signal. Volume certainly came in strong the last two days. Stochastics are now above 80 and relative strength studies are all positive. I've set the stop beneath support at 6.4% or $45.11.
The weekly chart isn't as favorable as I expected. The weekly PMO is on a SELL Signal and falling. The rest is good. The RSI is rising above 50 and the SCTR, while not in the "hot zone" above 70* is nearing that territory quickly. I don't know that it will hit this upside target in the near future, but the stock should hold up well enough to keep the stop from triggering. Semiconductors seem to be impervious to strong market declines right now.
*If a stock is in the "hot zone" above 70, it implies that it is stronger than 70% of its universe (large-, mid-, small-caps and ETFs) primarily in the intermediate to long terms.
EQT Corp. (EQT)
EARNINGS: 07/26/2023 (AMC)
EQT Corp. is a natural gas production company, which engages in the supply, transmission, and distribution of natural gas. The company was founded in 1888 and is headquartered in Pittsburgh, PA.
Predefined Scans Triggered: P&F Bullish Catapult, Moved Above Upper Keltner Channel, Stocks in a New Uptrend (ADX), Moved Above Upper Bollinger Band, Moved Above Upper Price Channel, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
EQT is up +0.24% in after hours trading. There is a large saucer shaped bottom that is a bullish basing pattern. Today price broke out of the pattern. The RSI is positive and not yet overbought. The PMO is rising strongly on a Crossover BUY Signal. The OBV isn't confirming this breakout despite a high volume day. Why? The OBV is currently below its prior three tops. Price at those points was below the current price. That is a bearish reverse divergence. It isn't that strong, but it is there nonetheless. Stochastics are above 80. The group isn't outperforming yet, but EQT is doing just fine on its own which is no surprise given it is outperforming the group by a mile. The stop has to be set deeply due to today's big rally. I've chosen 7.9% or at $33.92.
I love the weekly chart so this could be considered an intermediate-term investment. The weekly RSI is positive, rising and not overbought. The weekly PMO is triggering a Crossover BUY Signal and the SCTR, while not in the hot zone, is very close to entering it. Upside potential is over 21% in my opinion.
Genworth Financial Inc. (GNW)
EARNINGS: 07/31/2023 (AMC)
Genworth Financial, Inc. is a financial services company, which engages in the provision of insurance, wealth management, investment and financial solutions. It operates through the following segments: U.S. Mortgage Insurance, Australia Mortgage Insurance, U.S. Life Insurance, and Runoff. The U.S. Mortgage Insurance segment offers mortgage insurance products predominantly insuring prime-based, individually underwritten residential mortgage loans. The Australia Mortgage Insurance segment offers flow mortgage insurance and selectively provides bulk mortgage insurance that aids in the sale of mortgages to the capital markets and helps lenders manage capital and risk. The U.S. Life Insurance segment offers long-term care insurance products as well as service traditional life insurance and fixed annuity products in the United States. The Runoff segment includes the results of non-strategic products which are no longer actively sold but continue to service its existing blocks of business. Its non-strategic products primarily include variable annuity, variable life insurance, institutional, corporate-owned life insurance and other accident and health insurance products. The company was founded in 1871 and is headquartered in Richmond, VA.
Predefined Scans Triggered: None.
GNW is down -1.40% in after hours trading so it is taking back some of today's gains. The stock broke out on Monday and has continued to inch higher above all three key moving averages. The RSI is positive and rising slowly. We got a new PMO BUY Signal today. Stochastics are rising and should move above 80 soon. The group has been underperforming, but GNW has been strong relative to both the group and the SPY. The stop is set below gap support and above the 200-day EMA at 7.7% around $5.26. This is a low-priced stock so position size wisely.
The weekly chart is almost healthy enough to consider this an intermediate-term investment. My hesitation is that the swings have been very strong and in some cases painful. I would stay true to the stop. It could likely breakout based on the positive weekly RSI and decelerating weekly PMO. The SCTR is already in the hot zone. I would consider an upside target of 16% on a breakout, near $6.61.
Workday, Inc. (WDAY)
EARNINGS: 05/25/2023 (AMC)
Workday, Inc. engages in the development of enterprise cloud applications for finance and human resources. It delivers financial management, human capital management and analytics applications designed for companies, educational institutions and government agencies. The company was founded by David A. Duffield and Aneel Bhusri in March 2005 and is headquartered in Pleasanton, CA.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Bollinger Band, Moved Above Upper Price Channel and P&F Low Pole.
WDAY is unchanged in after hours trading. This was also a runner-up on Tuesday. Glad to see the requests as I now know that you're finding the list of runner-ups as helpful. Given it was a runner-up, you know I like the chart. Today saw a strong breakout above resistance. The RSI is positive, not overbought and rising. The PMO is on a new Crossover BUY Signal. Stochastics are above 80. The group has been outperforming for some time. We know this is a strong candidate as it is beginning to outperform and already strong Software group. Consequently, it is outperforming the SPY. The stop is set below the 200-day EMA at 7.9% or $180.28.
This is intermediate-term investment material. The weekly RSI is positive and rising. The weekly PMO just surged above the signal line. The SCTR is well within the hot zone. I've set upside potential to about 29% which matches up with the early 2022 top.
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 16% long, 7% short.
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
(c) Copyright 2023 DecisionPoint.com
Watch the latest episode of DecisionPoint Trading Room with Carl & Erin Swenlin on Mondays 7:00p EST or on the DecisionPoint playlist on the StockCharts TV YouTube channel here!
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.
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