When I run my group of scans, I never know which one will be the magic scan. Sometimes it is one here and one there, but today the selections all come from the PMO Crossover Scan. These are reversal candidates. I've listed the other results in the "Runner-ups" list as well as results from the Diamond PMO Scan which also produced a few symbols.
One selection is from one of the Insurance industry groups. That was my pick Friday for Industry Group to Watch so it seemed appropriate to include one.
Have a happy and safe 4th of July! I'll be back for ETF Day on Wednesday.
ANNOUNCEMENT: Erin will be on Making Money with Charles Payne on Wednesday. It's taken awhile for the schedule to work out, but this time it appears we are on. It's on Fox Business at 11a PT/2p ET.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": ALL, CLDT and GPN.
Runner-ups: NMIH, UBA, TSLA, PEAK, ARE and INN.
** JULY VACATION **
I will be in Europe 7/14 - 7/28 so there will not be any Diamonds reports or trading rooms during that time. All subscribers with active subscriptions on 7/28 will be compensated with two weeks added to their renewal date.
RECORDING LINK (6/30/2023):
Topic: DecisionPoint Diamond Mine (6/30/2023) LIVE Trading Room
Passcode: June#30th
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When: Jul 7, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (7/7/2023) LIVE Trading Room
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Here is the last recording from 6/23, no recording on 7/3:
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.
Allstate Corp. (ALL)
EARNINGS: 08/01/2023 (AMC)
The Allstate Corp. engages in the property and casualty insurance business and the provision of protection solutions. It operates through following business segments: Allstate Protection, Protection Services, Allstate Health and Benefits, Run-off Property-Liability, and Corporate and Other. The Allstate Protection segment offers private passenger auto, homeowners, other personal lines, and commercial insurance marketed under the Allstate, National General, and Answer Financial brand names. The Protection Services segment provides a range of products and services that expand and enhance customer value propositions including Allstate Protection Plans, Allstate Dealer Services, Allstate Roadside, Arity, and Allstate Identity Protection. The Allstate Health and Benefits segment offers voluntary benefits and individual life and health products, including life, accident, critical illness, short term disability, and other health insurance products sold through independent agents, benefit brokers, and Allstate exclusive agencies. The Run-off Property-Liability segment relates to property and casualty insurance policies with exposure to asbestos, environmental, and other claims. The Corporate and Other segment includes the company's holding activities and certain non-insurance operations. The company was founded on April 17, 1931 and is headquartered in Northbrook, IL.
Predefined Scans Triggered: Elder Bar Turned Green, P&F Descending Triple Bottom Breakdown and P&F Double Bottom Breakout.
ALL is down -1.37% in after hours trading. ALL has been in a trading range for months and I'm okay with this because it is at the bottom of the range with indicators lined up to suggest another test of the top. The RSI just moved positive and there is a new PMO Crossover BUY Signal. Stochastics are rising but not above net neutral (50) so it is early in this move. Admittedly relative strength isn't great, but I don't see any underperformance so that is fine. The stop is set below support near the March low at 6% or $103.87.
ALL is in an even larger trading range on the weekly chart. This chart hasn't shaped up yet, so we would look at this as a short-term trade instead of an intermediate-term investment. The weekly RSI is negative and the weekly PMO is still declining. The StockCharts Technical Rank (SCTR) is in the basement well below the "hot zone" above 70. This is definitely a reversal play. I think it is over optimistic based on the weekly chart to look for all-time highs, but it isn't out of the question.
*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.
Chatham Lodging Trust (CLDT)
EARNINGS: 08/02/2023 (BMO)
Chatham Lodging Trust engages in the acquisition and investment in hotel properties. It focuses on the upscale extended-stay and premium branded select-service hotels. The firm's management evaluates the company's hotels as a single industry segment because all of the hotels have similar economic characteristics and provide similar services to similar types of customers. The company was founded on October 26, 2009 and is headquartered in West Palm Beach, FL.
Predefined Scans Triggered: P&F Spread Triple Bottom Breakdown, Parabolic SAR Buy Signals, P&F Double Bottom Breakout and P&F Bull Trap.
CLDT is up +0.51% in after hours trading. This is a rare triple-bottom bullish chart pattern. I don't see these often. I really like the set-up here. Price just closed above the 50-day EMA and formed a bullish engulfing candlestick today. The RSI is now positive and isn't overbought. The PMO just triggered a Crossover BUY Signal. Stochastics are rising strongly and are above net neutral (50). Relative strength studies are bullish across the board. In particular, the group is really beginning to pick up strength. The stop is set below the first and second bottoms of the chart pattern. I didn't want it as deep so I didn't go below the last bottom. It is set at 7.4% or $9.07.
Upside potential is great here, but I would still consider this a short-term investment given the weekly chart hasn't firmed up yet. The weekly RSI is rising but still very negative. The weekly PMO has turned up, but the SCTR is well outside the hot zone. If it can retrace to the top of the trading zone, it would be a very lucrative investment.
Global Payments, Inc. (GPN)
EARNINGS: 07/31/2023 (BMO)
Global Payments, Inc. engages in the provision of payment technology and software solutions. It operates through the following segments: Merchant Solutions, Issuer Solutions and Business & Consumer Solutions. The Merchant Solutions segment provides payments technology and software solutions to customers globally. It also provides a variety of value-added services, including specialty point-of-sale solutions, analytic and engagement tools, payroll services and reporting that assist customers with driving demand. The Issuer Solutions segment provides solutions that enable financial institutions and other financial service providers to manage their card portfolios, reduce technical complexity and overhead and offer a seamless experience for cardholders on a single platform. It also provides commercial payments and e Payables solutions that support business-to-business payment processes for businesses and governments. The Business and Consumer Solutions segment provides general purpose reloadable prepaid debit and payroll cards, demand deposit accounts and other financial service solutions to the under banked and other consumers and businesses in the United States through Netspend brand. The company was founded in 1967 by George W. Thorpe and is headquartered in Atlanta, GA.
Predefined Scans Triggered: Elder Bar Turned Green, Bullish MACD Crossovers and Parabolic SAR Buy Signals.
GPN is down -0.09% in after hours trading. Here we have a bullish double-bottom pattern forming. It is close to being confirmed with a breakout above the last high or middle of the "W". The RSI just moved into positive territory and we have a new PMO Crossover BUY Signal. Stochastics have just gotten above 50 and relative is really picking up for GPN. The group is traveling inline with the SPY which isn't bad given the SPY is in a bull market. The stop is set at 7.5% or $94.49.
The weekly chart is looking up but I'd be careful making this an intermediate-term hold as the long-term declining trend has not been broken yet. The weekly PMO is nearing a Crossover BUY Signal and the weekly RSI is rising and nearly above 50. The SCTR definitely needs some help. If it can return to the 2023 high, it would be an over 19% gain.
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 60% long, 0% 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
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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:
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
For more links, go to DecisionPoint.com