With the market spinning out of control, I decided to run my "Diamond Dog" Scan. It's a scan I think that I will add to the new Scan Alert System when the market makes a turn like we are seeing now. Regular Diamonds Scans are not coming up with many ideas.
I opted not to include a short in today's report, but I have given you some charts to look at that are shorting opportunities. I'm picky about my shorts. I really want to see a PMO topping beneath the zero line and broken support levels. I didn't see too many of those in the results. I also like to see relative strength declining. I'm on the look out and I will cover a short when I see one I really like.
I did find three stocks on the buy side that I liked. If we're going to go long, we need to find stocks with price above their 200-day EMA or see PMOs above the zero line. I did compromise on one of the Diamonds in the Rough today, it was above the 200-day EMA, but the PMO was below the zero line.
I am not going to be expanding my portfolio. In fact, I'm lightening the load and will add another hedge based on trading tomorrow. We are very extended to the downside so I do expect to see a bounce of some sort by the end of the week. That would be prime time for adding shorts as I see the market in a lengthy decline from here on out.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": CBOE, OII and UTHR.
Runners-up: AORT, CALM, PDCO, C (Short), CALX (Short) and HSY (Short).
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
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 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.
CBOE Global Markets Inc. (CBOE)
EARNINGS: 11/09/2023 (BMO)
Cboe Global Markets, Inc. engages in the provision of trading and investment solutions to investors. It operates through the following business segments: Options, North American Equities, Futures, Europe and Asia Pacific, Global FX, and Digital. The Options segment includes the options exchange business, which lists trading options on market indexes (index options), as well as on non-exclusive multiply listed options. The North American Equities segment covers listed cash equities and ETP transaction services that occur on BZX, BYX, EDGX, and EDGA. The Futures segment is composed of the business of futures exchange, CFE, which includes offering for trading futures on the VIX Index and bitcoin and other futures products. The Europe and Asia Pacific segment relates to the pan-European listed cash equities transaction services, ETPs, exchange-traded commodities, and international depository receipts that occur on the RIE, operated by Cboe Europe Equities. The Global FX segment represents the institutional FX trading services that occur on the Cboe FX platform. The Digital segment refers to Cboe Digital, which operates a digital asset spot market and a regulated futures exchange. The company was founded in 1973 and is headquartered in Chicago, IL.
Predefined Scans Triggered: P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
CBOE is down -0.71% in after hours trading. I hope that the decline right now doesn't carry into tomorrow as it would likely break below the support it has worked so hard to build over the past five days. Still, this one came through on my Surge Scan so while it is an eye test, the PMO has surged above the signal line. The EMAs are configured positively with the slowest EMA on the bottom and fastest on the top. This one shows internal strength as Stochastics are still rising above net neutral (50). The RSI is also positive. This is a winner that we are looking to keep on winning in spite of market weakness. Relative strength is excellent against the group and SPY. My stop is set beneath support at 6% or $146.57.
The weekly chart shows the price strength as it is making new highs right now. The weekly PMO is rising and isn't overbought despite the lengthy rally. The StockCharts Technical Rank (SCTR) is at the top of the hot zone* which suggests we will see some follow-through. Consider an upside target around 15% or $179.32.
*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.
Oceaneering Intl, Inc. (OII)
EARNINGS: 10/25/2023 (AMC)
Oceaneering International, Inc. engages in the provision of engineered services and products, and robotic solutions to the offshore energy, defense, aerospace, manufacturing, and entertainment industries. It operates through the following business segments: Subsea Robotics, Manufactured Products, Offshore Projects Group (OPG), Integrity Management & Digital Solutions (IMDS), and Aerospace and Defense Technologies (ADTech). The Subsea Robotics segment includes remotely operated vehicles, survey services, and ROV tooling businesses. The Manufactured Products segment provides distribution systems, such as production control umbilicals and connection systems made up of specialty subsea hardware, and provides turnkey solutions that include project management, engineering design, fabrication/assembly, and installation of autonomous mobile robotic technology to industrial, manufacturing, healthcare, warehousing, and commercial theme park markets. The OPG segment focuses on subsea project capabilities and solutions. The IMDS segment covers asset integrity management, corrosion management, inspection, and nondestructive testing services. The ADTech segment provides government services and products, including engineering related manufacturing in defense and space exploration activities. The company was founded in 1969 and is headquartered in Houston, TX.
Predefined Scans Triggered: New CCI Buy Signals, Parabolic SAR Buy Signals and P&F Double Top Breakout.
OII is unchanged in after hours trading. The EMAs are configured positively for OII and price is well above the 200-day EMA. The PMO just triggered a Crossover BUY Signal well above the zero line. I didn't annotate it, but I do see the possibility that this is confirming a bullish flag formation. Volume is coming in very strong. The RSI is positive and Stochastics are rising vertically above net neutral (50). Relative strength is excellent with the group soaring and OII outperforming the group and the SPY by a mile. The stop would be too deep for me to set it under support so I lined it up with where the 20-day EMA might be on a decline at 6.6% or $24.31.
The weekly PMO is surging above the signal line. The weekly RSI is overbought right now, but it can stay that way for a few weeks at a time. The SCTR is at the top of the hot zone suggesting it does have internal strength and upside potential. I would consider at 15% upside target around $29.93.
United Therapeutics Corp. (UTHR)
EARNINGS: 11/01/2023 (BMO)
United Therapeutics Corp. is a biotechnology company, which engages in the development and commercialization of products for patients with chronic and life-threatening conditions. Its products include Adcirca, Orenitram, Remodulin, TYVASO, and Unituxin. The company was founded by Martine A. Rothblatt on June 26, 1996 and is headquartered in Silver Spring, MD.
Predefined Scans Triggered: New CCI Buy Signals and P&F High Pole.
UTHR is unchanged in after hours trading. This is the more risky of today's selections given the negative configuration of the EMAs. However, I do note that the 5-day EMA just crossed above the 20-day EMA for a Short-Term Trend Model BUY Signal. Also price closed above the 200-day EMA. I would prefer the PMO Crossover BUY Signal would have occurred above the zero line for added strength, but it isn't that far below given the bottom of the PMO's normal range. Stochastics are rising very strongly and relative strength is improving across the board. The RSI is positive. I've set the stop below support at 6.1% or $215.88.
You can't tell on the chart, but I verified that the weekly PMO has turned back up on this week's rally. The weekly RSI is now in positive territory and the SCTR, while not in the hot zone, is moving quickly higher toward the hot zone. I see underlying internal strength on UTHR. I've set the upside target conservatively to the prior high at 14.4%.
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 25% 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
(c) Copyright 2023 DecisionPoint.com
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