I'm not the only one having trouble finding buying opportunities. Reader Requests came in very light so I had to put some symbols in from my scans. I don't really feel strongly about any of the symbols today and I apologize for that, but the market is not presenting us with good opportunities right now. Think "watch list" material.
I ran my Diamond Dog Scan to find some shorting opportunities, but I wasn't impressed with the selections. They just weren't bearish enough or the declines seemed stale and likely to end.
Of the four requests that came in, only one made the cut today. One was presented last week so I didn't want to repeat (PKG). The second was a vertical rally that is begging for a pullback (METC) and the third was a 3x Bull on Home Builders (NAIL) which wasn't ripe. I also have the prior two weeks with shorts in the Home Builders.
BECN was a request, but the other three symbols are from my scans. I would avoid expanding your portfolio. I was surprised at how many scan results I didn't like. That tells me to proceed with caution.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": BECN, FBP, MATX and OTTR.
RECORDING LINK (9/15/2023 - No recording on 9/22):
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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Here is the last recording from 9/25:
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.
Beacon Roofing Supply Inc. (BECN)
EARNINGS: 11/02/2023 (AMC)
Beacon Roofing Supply, Inc. engages in the distribution of residential and non-residential roofing materials. It also distributes complementary building products including siding, windows, specialty exterior building products, insulation, and waterproofing systems for building exteriors. The company was founded on August 22, 1997 and is headquartered in Herndon, VA.
Predefined Scans Triggered: Parabolic SAR Buy Signals and Declining Chaikin Money Flow.
BECN is up +0.42% in after hours trading. There is a bullish double bottom pattern that would suggest and upside breakout past the last top with a minimum upside target that would imply a breakout above the August top ahead. The RSI just moved into positive territory. The PMO is on a brand new Crossover BUY Signal. Stochastics have moved above 50. The industry group itself is treading water, but BECN is outperforming the group and the SPY. The stop is set below support at 5.9% or $74.01.
The weekly chart suggests this should be a short-term timeframe trade mainly because the weekly PMO is on a Crossover SELL Signal and is declining. The weekly RSI is positive, but price sure is vulnerable to a test of support at the early 2023 high. The StockCharts Technical Rank (SCTR) is in the hot zone* above 70. If the double bottom fulfills, look for a 13% 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.
First Bancorp (FBP)
EARNINGS: 11/01/2023 (BMO)
First BanCorp (Puerto Rico) is a holding company, which engages in the provision of personal, commercial, and corporate banking services. It operates through the following segments: Commercial and Corporate Banking, Consumer (Retail) Banking, Mortgage Banking, Treasury and Investments, United States Operations, and Virgin Islands Operations. The Commercial and Corporate Banking segment consists of the company's lending and other services for large customers represented by specialized and middle-market clients and the public sector. The Consumer (Retail) Banking segment includes consumer lending and deposit-taking activities conducted mainly through FirstBank's branch network in Puerto Rico. The Mortgage Banking segment focuses on the origination, sale, and servicing of a variety of residential mortgage loan products and related hedging activities. The Treasury and Investments segment deals with treasury and investment management functions. The United States Operations segment represents all banking activities conducted by FirstBank on the United States mainland. The Virgin Islands Operations segment includes all banking activities conducted by FirstBank in the U.S. Virgin Islands and the British Virgin Islands. The company was founded on October 29, 1948 and is headquartered in San Juan, Puerto Rico.
Predefined Scans Triggered: Elder Bar Turned Green, Bullish MACD Crossovers, Parabolic SAR Buy Signals and Entered Ichimoku Cloud.
FBP is down -1.76% in after hours trading so today's gain may not stay tomorrow. This will leave the PMO vulnerable to a drop since it only just turned back up. I make my picks and then I look to see what is happening in after hours trading since it isn't always predictive, but it is generally disheartening to see a decline. This is new momentum and while I wouldn't go with this normally (pickin's slim), I opted to press forward given the breakout above the 20/50/200-day EMAs. The RSI is headed to positive territory, the PMO just turned up and most of all, Stochastics are rising suggesting we will see follow-through on this rally. I've set the stop thinly below support at 5.4% or $13.10.
The weekly isn't that bad, but it isn't good enough to look at this for the intermediate term given the weekly PMO is flat and not rising. The weekly RSI looks good and the SCTR is rising in the hot zone so there are pluses here. It has been somewhat range bound. If it can get back to the top of the range, it would be an over 15% gain.
Matson, Inc. (MATX)
EARNINGS: 11/02/2023 (AMC)
Matson, Inc. is a holding company, which engages in the provision of logistics and transportation services. It operates through the Ocean Transportation and Logistics segments. The Ocean Transportation segment offers ocean freight transportation, container stevedoring, refrigerated cargo services, inland transportation, and other terminal services. The Logistics segment includes domestic and international rail intermodal services, regional highway brokerage, specialized hauling, expedited freight operations, supply chain management, storage, and distribution services. The company was founded in 1882 by William Matson and is headquartered in Honolulu, HI.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, Stocks in a New Uptrend (Aroon), Moved Above Ichimoku Cloud and Moved Above Upper Price Channel.
MATX is up +0.18% in after hours trading. This chart I like better than the above. We have a double bottom look and price is about to move above the confirmation line. The RSI is positive and not overbought. The PMO Crossover BUY Signal looks really good as it is coming in above the zero line. Stochastics are oscillating above 80 indicating internal strength. Relative strength studies are excellent with MATX killing it in comparison to the SPY. The industry group is also flourishing. I've set the stop at 7.7% or $83.42.
The weekly chart is mixed. The weekly PMO is flat and unimpressive right now. However, the weekly RSI is very favorable and the SCTR is at the top of the hot zone. I think an upside target of 36% is very optimistic, but if it does breakout above the prior top, it likely will make a move back up there.
Otter Tail Power Co. (OTTR)
EARNINGS: 10/30/2023 (AMC)
Otter Tail Corp. is a holding company engaged in the energy, infrastructure, and production businesses. It operates through the following segments: Electric, Manufacturing, and Plastics. The Electric segment is involved in the generation, purchase, transmission, distribution, and sale of electric energy in western Minnesota, eastern North Dakota, and northeastern South Dakota. The Manufacturing segment consists of businesses in the manufacturing arena, including contract machining, metal parts stamping, fabrication, and painting, and the production of plastic thermoformed horticultural containers, life science and industrial packaging, material handling components, and extruded raw material stock. The Plastics segment offers businesses that produce polyvinyl chloride pipes at plants in North Dakota and Arizona. The company was founded in 1907 and is headquartered in Fergus Falls, MN.
Predefined Scans Triggered: None.
OTTR is up +1.44% in after hours trading, basically erasing today's decline. There is a textbook double bottom pattern that formed right on top of the 200-day EMA. The pattern isn't confirmed yet with a breakout but it looks pretty good. The RSI is not positive and did turn down below net neutral (50) on today's decline, but I like the nearing PMO Crossover BUY Signal and rising Stochastics. Also working in its favor is relative strength which is rising for the group and OTTR against the SPY. The stop could be tighter if you wish. I've set it below support and the 200-day EMA at 5.9% or $73.33.
The weekly chart is trying to improve. The big problem for it is the very negative weekly PMO configuration. Keep this one short-term. The weekly RSI did just move into positive territory. The SCTR isn't in the hot zone yet, but it appears on its way. If it can recapture this year's high it would be a 20% 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 10% 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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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)
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