It was a light day for Reader Requests so I had to go out on my own and add two to the list of four. One subscriber requested Pharmaceuticals that are involved in COVID vaccines that may be required or mandatory in a few months. I must say that none of them looked that appetizing, but I did find one that had been an alternate "Diamond in the Rough" on Tuesday.
I'm hesitant to go with Gold Miners or Energy related stocks right now as I'm not confident in the rally for Gold Miners yet and Crude Oil is acting fishy.
I will admit to smacking my head hard having let go of TECS the inverse of Technology a day too early. I didn't want to be exposed given NVDIA was reporting earnings today. Ugh, NVDA did nothing for the group after the morning finished and XLK was down -2.30%. Ouch. I'll probably reenter that short position soon or something similar.
I'm making headway on the DP Scan Alert System. I am now putting together what should be a final product. There are some backend tasks that will need to be finished, but I should have it ready to beta test by next month if not sooner. If you'd be interested in being a beta tester, let me know. The system basically gives you all of the scan results from my primary scans for the SP1500, Dow 65 and Nasdaq 100. You will get unfiltered results from where I select nearly every "Diamond in the Rough" (I do go out on my own now and then). It is for the "do-it-yourselfer" or those who want more than just 10 symbols a week like we have in Diamonds. It is only the symbols or raw results, no analysis.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": BMRN, MRNA, PMT and RVMD.
Other requests: PFE, BNTX, NVAX, JFR, BVN, NXE, CEQP and ATR.
RECORDING LINK (8/18/2023):
Topic: DecisionPoint Diamond Mine (8/18/2023) LIVE Trading Room
Passcode: August#18
REGISTRATION for 8/25/2023:
When: Aug 25, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (8/25/2023) 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 from 8/21:
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.
BioMarin Pharmaceutical, Inc. (BMRN)
EARNINGS: 10/25/2023 (AMC)
BioMarin Pharmaceutical, Inc. engages in the development and commercialization of therapies for people with serious and life-threatening rare diseases and medical conditions. Its pipeline products include Valoctocogene roxaparvovec, Vosoritide, and BMN 307. The company was founded by John C. Klock, Christopher M. Starr and Grant W. Denison on March 21, 1997, and is headquartered in San Rafael, CA.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Bollinger Band and Parabolic SAR buy Signals.
BMRN is unchanged in after hours trading. This was one of my selections. We nearly saw a "Silver Cross" of the 20/50-day EMAs today so a bullish bias is materializing. The only hesitation I have is that price is about to test overhead resistance, but given it did close above the 200-day EMA, I think it has a good chance at breaking out. The RSI is positive, rising and not overbought. The PMO had a surge above the signal line I believe last week. Stochastics are rising in positive territory after dipping briefly below net neutral (50). The rising price trend is healthy and relative strength is okay for the Biotech group, but BMRN is outperforming the group and the SPY. I've set the stop below short-term support at 5.9% or $87.64.
The weekly chart is improving quickly. The weekly RSI is positive and the weekly PMO is turning up. The StockCharts Technical Rank (SCTR) is rising strongly and should move into the hot zone* above 70 soon. I don't know if it will rally to the 2023 high, but if it can, that would be a 27% gain.
*If a stock/ETF 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.
Moderna Inc. (MRNA)
EARNINGS: 11/02/2023 (BMO)
Moderna, Inc. engages in the development of transformative medicines based on messenger ribonucleic acid (mRNA). Its product pipeline includes the following modalities: prophylactic vaccines, cancer vaccines, intratumoral immuno-oncology, localized regenerative therapeutics, systemic secreted therapeutics, and systemic intracellular therapeutics. The company was founded by Noubar B. Afeyan, Robert S. Langer, Jr., Derrick J. Rose and Kenneth R. Chien in 2010 and is headquartered in Cambridge, MA.
Predefined Scans Triggered: P&F Double Top Breakout.
MRNA is up +0.47% in after hours trading. I am not happy about the pullback. I like to see a breakout and then a pullback. However, the indicators are still positive and the PMO in particular looked unimpressed with the decline of the past two days. The RSI is still positive, but is moving lower on today's decline. Stochastics stayed propped up above 80 despite today's big decline. I see internal strength. Relative strength is rising for the group as well as for MRNA. The stop is set at 7.7% below the 20-day EMA or at $103.97.
The weekly chart tells me this should be considered a short-term trade not an intermediate-term investment. The weekly RSI is negative and the weekly PMO is declining. The SCTR is in the basement. I do see a tiny breakout above long-term support that is encouraging. I wouldn't get greedy here, but clearly if it could make it to the next level of resistance, that would be a sizable gain.
PennyMac Mortgage Investment Trust (PMT)
EARNINGS: 10/26/2023 (AMC)
PennyMac Mortgage Investment Trust is a finance company, which invests primarily in residential mortgage loans and mortgage-related assets. It operates through following segments: Correspondent Production, Credit Sensitive Strategies, Interest Rate Sensitive Strategies, and Corporate Activities. The Correspondent Production segment deals with purchasing, pooling, and reselling newly originated prime credit quality mortgage loans either directly or in the form of mortgage-backed securities in capital markets. The Credit Sensitive Strategies segment includes investments in distressed mortgage loans, real estate acquired in settlement of mortgage loans, real estate held for investment, credit risk transfer agreements, non-agency subordinated bonds, and small balance commercial real estate mortgage loans. The Interest Rate Sensitive Strategies segment focuses on investments in mortgage servicing rights, excess servicing spread, agency and senior non-agency mortgage-backed securities, and the related interest rate hedging activities. The Corporate segment includes management fee and corporate expense amounts and certain interest income. The company was founded by Stanford L. Kurland on May 18, 2009 and is headquartered in Westlake Village, CA.
Predefined Scans Triggered: Bullish MACD Crossovers and Parabolic SAR Buy Signals.
PMT is unchanged in after hours trading. The double bottom is what caught my eye. The 20-day EMA is staying above the 50-day EMA so it holds a Silver Cross. A breakout above the confirmation line would imply price could recapture highs from July. It's early as the indicators are only just moving positive. The RSI isn't quite above net neutral (50) yet. The PMO is just now turning up. Stochastics just moved above 50. The industry group isn't performing that well, but PMT is outperforming on its own. The stop is set beneath support at 5.4% or $12.21.
The weekly chart is alright. I would think of this as short-term not intermediate-term. The weekly RSI is camped out on net neutral (50) and the weekly PMO is flat and indecisive. The most positive aspect is that the SCTR is in the hot zone. I would look for a move to test overhead resistance at the 2023 highs.
Revolution Medicines Inc (RVMD)
EARNINGS: 11/06/2023 (AMC)
Revolution Medicines, Inc. is a clinical-stage precision oncology company focused on developing novel targeted therapies. It engages in the discovery and development of cancer treatment by pioneering novel combination and monotherapy treatment regimens to maximize the depth and durability of clinical benefit and circumvent adaptive resistance mechanisms for patients which are dependent on the RAS and mTOR pathway. The company was founded by Mark A. Goldsmith, Kevan Shokat, Martin D. Burke, David L. Pompliano and Michael Fischbach in October 2014 and is headquartered in Redwood City, CA.
Predefined Scans Triggered: New CCI Buy Signals.
RVMD is unchanged in after hours trading. Here we have a short-term bullish double bottom that has been confirmed with the breakout above the prior high. The RSI is positive and not overbought. The PMO didn't surge above the signal line, it whipsawed back into a Crossover BUY Signal which I believe is also very positive. The OBV is definitely confirming this rally and Stochastics are rising strongly in positive territory. Relative strength is improving nicely. I've set the stop beneath the 20-day EMA at 6.9% or $29.62.
This one does have the potential to be an intermediate-term investment. Price is forming a nice base. The weekly RSI is positive and not yet overbought. The weekly PMO is rising on a Crossover BUY Signal. The SCTR is at the top of the hot zone above 70. It will need to overcome strong resistance, but it is set up well.
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 8% 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