Thank you for sending in symbols to help my shorten my analysis process today. I was able to get part of the report finished before heading to the Gala Dinner for Hyundai Hope on Wheels. My daughter is a cancer survivor and back in 2008 was selected to be the National Youth Ambassador for the program. They invited us to D.C. to celebrate 25 years of supporting pediatric cancer research. It was a special night.
I'll make this short. There will be no Diamond Mine trading room tomorrow, but the Recap will go out at the normal time as I'll have made it home by then.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": R, SQQQ, TRMD and WY (Short).
RECORDING LINK (9/15/2023):
Topic: DecisionPoint Diamond Mine (9/15/2023) LIVE Trading Room
Passcode: Sept#15th
REGISTRATION for 9/29/2023**:
When: Sep 29, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (9/29/2023) LIVE Trading Room
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** There will be no trading room this Friday (9/22).
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Here is the last recording from 9/18:
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.
Ryder System, Inc. (R)
EARNINGS: 10/25/2023 (BMO)
Ryder System, Inc. is a logistics and transportation company, which engages in providing supply chain, dedicated transportation, and fleet management solutions. It operates through the following business segments: Fleet Management Solutions (FMS), Supply Chain Solutions (SCS), and Dedicated Transportation Solutions (DTS). The FMS segment provides full-service leasing and leasing with flexible maintenance options, commercial rental and maintenance services of trucks, tractors, and trailers. The SCS segment provides integrated logistics solutions, including distribution management, dedicated transportation, transportation management, e-commerce and last mile, and professional services. The DTS segment provides turnkey transportation solutions, including dedicated vehicles, drivers, management, and administrative support. The company was founded by James A. Ryder in 1933 and is headquartered in Miami, FL.
Predefined Scans Triggered: New 52-week Highs, Stocks in a New Uptrend (ADX), P&F Double Top Breakout, P&F Triple Top Breakout and P&F Quadruple Top Breakout.
R was unchanged in after hours trading. I was impressed with this chart based on the breakout from the recent trading range. Volume is coming in with the OBV clearly confirming the current rising trend. The RSI is positive and there is a new PMO Crossover BUY Signal. Stochastics are also above 80. My one complaint is the declining relative strength of the industry group. R is doing very well as far as relative strength so this is forgivable. The stop is set below the last low at 7.6% or $96.00.
The weekly chart is quite healthy and this week's breakout looks good. The weekly RSI is positive and it appears there is a weekly PMO Surge above the signal line. The SCTR is well within the hot zone* above 70. While this could be an intermediate-term investment, keep a short time horizon given market weakness. You could set a 15% upside target around $119.48.
*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.
ProShares UltraPro Short QQQ (SQQQ)
EARNINGS: N/A
SQQQ provides (-3x) inverse exposure to a modified market-cap-weighted index of 100 of the largest non-financial firms listed on the NASDAQ.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Keltner Channel, Moved Above Upper Bollinger Band, Moved Above Upper Price Channel and Runaway Gap Ups.
SQQQ was up +0.24% in after hours trading. Given the extreme weakness we see in the market, this should be a very good hedge. The technicals on the chart confirm this. There is a bullish double bottom on price. The RSI is in positive territory and rising. The PMO is on a BUY Signal and has reached positive territory. Stochastics are above 80 and unsurprisingly, it is showing relative strength. I've set a very deep stop on this one, but you could certainly set it much lower. I've got it at 9.2%, below gap support or $18.59.
The weekly chart is confirming the bullish daily chart. While the weekly RSI isn't positive, it is rising nicely. The weekly PMO is rising on a Crossover BUY Signal and volume is coming in based on the OBV. I've set upside target at 28.3%, but not sure it will actually reach that level unless we slip into a seriously deep correction across all the markets.
Torm Plc (TRMD)
EARNINGS: 11/09/2023 (BMO)
TORM Plc engages in the business of transporting clean and dirty petroleum products. It operates under the Tanker and Marine Exhaust segments. The Tanker segment focuses on the transportation of refined oil products such as gasoline, jet fuel, and naphtha. The Marine Exhaust segment includes developing and producing advanced and green marine equipment. The company was founded by Ditlev E. Torm and Christian Schmiegelow in 1889 and is headquartered in London, the United Kingdom.
Predefined Scans Triggered: Moved Above Upper Keltner Channel and P&F Low Pole.
TRMD was up +0.70% in after hours trading. We have a nice bullish cup with handle pattern where the handle is a bullish falling wedge. Granted the rally is a bit parabolic, but overhead resistance doesn't arrive until $30. The RSI is positive and rising. The PMO is increasing its margin from its signal line as it rises on a Crossover BUY Signal. Stochastics are above 80 and relative strength is gaining across the board. I've set the stop at 7% or $25.39.
I can't make much of the PMO at this point, but the weekly RSI is positive and rising strongly on this week's rally. The SCTR is in the hot zone. I think a good upside target would be at about 19.4% around $32.50.
Weyerhaeuser Co. (WY) - SHORT
EARNINGS: 10/26/2023 (AMC)
Weyerhaeuser Co. engages in the manufacture, distribution, and sale of forest products. It operates through the following business segments: Timberlands, Real Estate, Energy and Natural Resources (Real Estate & ENR), and Wood Products. The Timberlands segment manages private commercial forestland worldwide, engages in growing and harvesting trees for lumber, building, pulp, paper and other wood products. The Real Estate and ENR segment delivers premiums to timber value by identifying and monetizing higher and better use lands and capturing the full value of surface and subsurface assets. The Wood Products segment delivers lumber, structural panels, engineered wood products and complementary building products for residential, multi-family, industrial and light commercial applications. The company was founded by Frederick Weyerhaeuser on January 18, 1900 and is headquartered in Seattle, WA.
Predefined Scans Triggered: Stocks in a New Downtrend (Aroon), Moved Below Lower Bollinger Band, Moved Below Ichimoku Cloud and P&F High Pole.
WY was unchanged during after hours trading. Last week a reader brought PHM on the short side. On Monday we discussed the bearishness of Homebuilders and brought up some similar symbols. A reader mentioned this one and I thought I'd cover it as it looks extremely bearish. The drop beneath support at the August low and the 200-day EMA are especially bearish. The next line of strong support is not going to arrive until about $27.50. The RSI is nearing 30 and the PMO is picking up speed to the downside. Stochastics are below 20 and relative strength is weakening for the group and WY. The stop is set to the upside at 7.5% or $33.51.
The weekly chart is also very bearish. The weekly RSI moved below net neutral (50) and there is a weekly PMO Crossover SELL Signal in the works. I think that we could see a breakdown below $27.50 or at least a move to that level.
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 35% long, 2% 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 3:00p 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