If we hadn't gone short a few weeks ago, the spreadsheet would look great going back this month. Of those that were long and not short, they are moving along. This week was quite good with the exception of three reader requests that all were hit hard today. It changed the character of two of the charts and had me moving Neutral on those positions.
We had one stop hit this week on Tuesday's pick TGTX. It was a deep stop, but not deep enough.
This week's "Darling" is Autozone (AZO) which finished up +3.01% since being picked on Tuesday. This week's "Dud" was reader requested Aspen Aerogels (ASPN) which honestly still looks good to me. It just was a bad day.
The Sector/Industry Group to Watch were easy to identify today. I had picked the Vanguard Consumer Staples ETF (VDC) on Wednesday so it should be no surprise that Consumer Staples (XLP) would be my Sector to Watch this week. The Industry Group to Watch was also easy as the Soft Drinks group looked almost identical to XLP. Two names that look good within that group: Pepsi (PEP) and Coca-Cola (KO).
Hope you have a great three-day weekend!
Good Luck & Good Trading,
Erin
RECORDING LINK (6/16/2023):
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Topic: DecisionPoint Diamond Mine (6/23/2023) LIVE Trading Room
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Our latest DecisionPoint Trading Room recording (6/12/2023):
A few items about the spreadsheet: I've put on the spreadsheet whether the RSI is positive (green) or negative (red). The PMO column tells you if it is rising (green) or falling (red). Finally I've added my own "Sparkle Factor" that gives you my assessment going forward, bullish (green), bearish (red) or neutral (gray). The Sparkle Factor is basically my thoughts on whether I expect it to rise or fall. A neutral means it could really go either way so it could be added to a watch list. If you're in a stock I consider "neutral" going forward, the ball is in your court.
Darling:
Autozone Inc. Nevada (AZO)
EARNINGS: 09/18/2023 (BMO)
AutoZone, Inc. engages in the retail and distribution of automotive replacement parts and accessories. The firm offers ALLDATA, which produces, sells, and maintains diagnostic and repair information software used in the automotive repair industry and E-commerce, which includes direct sales to customers. The company was founded by Joseph R. Hyde, III on July 4, 1979 and is headquartered in Memphis, TN.
Predefined Scans Triggered: Bullish MACD Crossovers and P&F Double Top Breakout.
Below are the commentary and chart from Tuesday (6/13):
"AZO is unchanged in after hours trading. We have a bullish double-bottom if you use the intraday low from late May. Price confirmed the pattern with yesterday's breakout and today is a continuation. These charts aren't perfect but they are definitely improving. The RSI is negative, but rising. The PMO is finally scooping up into a Crossover BUY Signal. Volume is coming in on this rally and Stochastics are rising. This stock isn't a relative leader in the group, but it has relative strength against the SPY which is paramount. The stop can be set thinly at 5.7% or $2282.95."
Here is today's chart:
It finished lower on the day, but set a much higher low and an even higher high. This seemed to be profit taking. I still see more upside potential. This is definitely a hold and could be entered here. We have a new PMO Crossover BUY Signal and the RSI has moved positive. Stochastics moved above 80 today despite the decline. Relative strength is still improving.
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!
Dud:
Aspen Aerogels, Inc. (ASPN)
EARNINGS: 08/02/2023 (AMC)
Aspen Aerogels, Inc. engages in designing, developing, and manufacturing aerogel insulation used primarily in the energy infrastructure and building materials markets. Its products include Cryogel, Pyrogel, and Spaceloft. The company was founded by Hamed S. Borhanian, Patrick J. Piper, and Kang P. Lee in May 2001 and is headquartered in Northborough, MA.
Predefined Scans Triggered: Elder Bar Turned Green, Moved Above Upper Bollinger Band and Moved Above Upper Price Channel.
Below are the commentary and chart from yesterday (6/15):
"ASPN is up +2.54% in after hours trading. My only problem with this chart is that overhead resistance is so close. It was also a giant rally today that will eventually need to be digested. Based on after hours trading, it doesn't look like resistance will be much of problem. The RSI is positive and rising. There was nearly a PMO Surge above the signal line in late May, but instead it whipsawed back and forth out of and then back into a BUY Signal. It is still a great looking PMO that isn't overbought. Stochastics have stayed above 80 and are rising again. The group overall has been outperforming in June, but cooled a little in mid-June. ASPN is slowly outperforming the group and consequently the SPY. The stop is set deeply based on today's 8.5%+ rally. I've set it at 9.8% or $7.45."
Here is today's chart:
I still like this chart. My sense is that it hit overhead resistance and fell back. I would look for it to breakout still given the favorable indicators. Today's big decline didn't faze them, although Stochastics ticked slightly below 80. I think this one is still available for entry as we saw a higher low and a higher high today in spite of the decline. This decline makes the stop far less deep. I see this as a large bullish double-bottom that would be confirmed on a breakout.
THIS WEEK's Sector Performance:
DecisionPoint Sector Scoreboard (Mechanical Trend Model Signals):
Click Here to view Carl's annotated Under the Hood ChartList!
Sector to Watch: Consumer Staples (XLP)
My interest was piqued quickly in this morning's Diamond Mine when I saw XLP's CandleGlance chart. The bullish double-bottom was visible as was the new PMO Crossover BUY Signal. I hadn't even looked "under the hood" yet. I was pleasantly surprised when I did. Look at the steady improvement of %Stocks above their 20/50-day EMAs. Readings aren't quite overbought yet. The Silver Cross Index just had a Bullish "Shift" as it crossed above its signal line. If the market is going to move lower or digest the current rally, defensive groups could take over leadership for a brief period.
Industry Group to Watch: Soft Drinks ($DJUSSD)
There is a Food & Beverage ETF (FTXG) that has Soft Drinks as a component, but I've opted to look strictly at the industry group chart. We have a large double-bottom that looks very much like XLP's. Price nearly confirmed the pattern on the intraday high but closed beneath the confirmation line. Given the positive RSI and approaching PMO Crossover BUY Signal, as well as Stochastics which are almost above 80, I expect this group to breakout. As mentioned in the opening, I like PEP and KO as their charts look nearly identical to the chart below. It makes sense, I believe the group is cap-weighted.
Go to our Under the Hood ChartList on DecisionPoint.com to get an in-depth view of all the sectors. On StockCharts.com you can find the Industry Summary.
Good Luck & Good Trading!
- Erin
erin@decisionpoint.com
Full Disclosure: I'm 40% long, 0% short.
Watch the latest episode of the DecisionPoint Trading Room with Carl & Erin Swenlin on Mondays 3:00p EST!
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
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 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 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)
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