The scans are clicking along and today there was one industry group that clearly dominated the scans. Property-Casualty Insurance saw six symbols come in today which I can tell you is a lot. Normally I only present three stocks on Tuesday, but today I'm giving you four.
I couldn't figure out which stock to leave out. One of the stocks is in Defense and that is likely to outperform given the war. The other two both had excellent upside potential with less risk than you typically see on these stocks so I couldn't pick which not to include.
I will likely do only three stocks on Thursday, but we'll see.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": AVAV, GPRE, VNO and WRB.
Runners-up: PG, CENTA, CTVA, HP, FICO and OPCH.
RECORDING LINK (10/13/2023):
Topic: DecisionPoint Diamond Mine (10/13/2023) LIVE Trading Room
Passcode: October@13th
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When: Oct 20, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (10/20/2023) LIVE Trading Room
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Here is the last recording from 10/16:
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.
AeroVironment Inc. (AVAV)
EARNINGS: 12/05/2023 (AMC)
AeroVironment, Inc. engages in the design, development, production, support and operation of unmanned aircraft systems and electric transportation solutions. The company was founded by Paul B. MacCready, Jr. in July 1971 and is headquartered in Arlington, VA.
Predefined Scans Triggered: None.
AVAV is up +1.26% in after hours trading. I'm not sure what the gap up was about, but price is now retracing back to the intraday high on that gap day. The earlier filled black candlestick did not result in bearish activity. We have a positive and not overbought RSI. The PMO is nearing a new Crossover BUY Signal. Stochastics are rising strongly toward 80. Relative strength kicked up for the group on the news of war and I do think that will continue to fuel this group. AVAV is a leader within the group based on relative strength. The stop is set beneath support at 6% or $108.83.
The weekly PMO has surged above the signal line (bottomed above the signal line). Price has broken out above very strong overhead resistance. The weekly RSI is in positive territory. The StockCharts Technical Rank (SCTR) is well within the hot zone* above 70. Upside potential is over 25% should it recapture the 2021 high.
*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.
Green Plains Inc (GPRE)
EARNINGS: 11/02/2023 (BMO)
Green Plains, Inc. engages in the production of fuel-grade ethanol and corn oil, the provision of grain handling, and storage commodity marketing and distribution services. It operates through the following segments: Ethanol Production, Agribusiness and Energy Services, and Partnership. The Ethanol Production segment produces ethanol, distillers' grain, and corn oil at ethanol plants in Indiana, Iowa, Minnesota, Nebraska, Tennessee, and Texas. The Agribusiness and Energy Services segment includes grain procurement and its commodity marketing business, which markets, sells, and distributes ethanol, distillers' grains, and corn oil produced at ethanol plants. The Partnership segment provides fuel storage and transportation services by owning, operating, developing, and acquiring ethanol and fuel storage tanks, terminals, transportation assets, and other related assets and businesses. The company was founded in June 2004 and is headquartered in Omaha, NE.
Predefined Scans Triggered: Bullish MACD Crossovers.
GPRE is unchanged in after hours trading. This was the one I nearly nixed today, but I liked the breakout that took price to the bottom of a long-term trading range. It appears ready to climb further into it. The RSI and Stochastics are both in negative territory and relative strength for the group could be better so the chart isn't perfect. But, the good news is that both the RSI and Stochastics are rising and so is the PMO. Relative strength shows that its rally was very strong in comparison to the group. The stop is set at 7.5% or $27.09. This is on my radar if it can hold support.
The weekly chart is another reason I picked it. This bounce is coming off the bottom of a months' long trading range. It didn't make it all the way up the last time, but certainly it has the potential of an over 29% gain. While the weekly RSI is negative and the SCTR isn't in the hot zone, the weekly PMO is turning up again.
Vornado Realty Trust (VNO)
EARNINGS: 10/30/2023 (AMC)
Vornado Realty Trust is a real estate investment trust, which engages in the ownership of office, retail, merchandise mart properties, and other real estate and related investments. It operates through the New York and Other segments. The company was founded by Steven Roth on March 29, 1993 and is headquartered in New York, NY.
Predefined Scans Triggered: Bullish MACD Crossovers.
VNO is down -0.58% in after hours trading. This one intrigued me due to the reverse head and shoulders pattern that implies price should return to the September high. The RSI just moved into positive territory and the PMO has turned up. Stochastics are in positive territory and are rising again. It is still holding onto its "Silver Cross" (20EMA > 50EMA). If the group decides to get going, this is the stock to be in based on its solid relative strength against the group. For now, we are content to see slight outperformance against the SPY. The stop is set at 7.6% or $20.69.
I didn't annotate it, but I see two possible bullish chart patterns. One would be a cup with handle and the other is a more complex reverse head and shoulders. Either way it's bullish. The weekly RSI is positive and the weekly PMO is beginning to surge above the signal line. The weekly PMO is overbought so be mindful of the upside target around 18%.
W. R. Berkley Corp. (WRB)
EARNINGS: 10/23/2023 (AMC)
W.R. Berkley Corp. is an insurance holding company, which engages in the property casualty insurance business. It operates through the following segments: Insurance and Reinsurance & Monoline Excess. The Insurance segment includes excess and surplus lines, admitted lines, and specialty personal lines throughout the United States, as well as insurance businesses in the United Kingdom, Continental Europe, South America, Canada, Mexico, Scandinavia, Asia, and Australia. The Reinsurance & Monoline Excess segment is involved in the reinsurance business on a facultative and treaty basis, primarily in the United States, United Kingdom, Continental Europe, Australia, the Asia-Pacific region, and South Africa. The company was founded by William R. Berkley in 1967 and is headquartered in Greenwich, CT.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Keltner Channel, Moved Above Upper Bollinger Band, Moved Above Upper Price Channel and P&F Double Top Breakout.
WRB is unchanged in after hours trading. This one looked the best of the Property-Casualty Insurance group. None of them really had rising relative strength against the group currently, but at least over time, WRB has been able to outperform the group. The RSI is positive and rising. There is a new PMO Crossover BUY Signal and Stochastics are almost above 80. This industry group has been cooking for awhile and WRB is outperforming the SPY. The stop was easy to set below support at 6.4% or $61.86.
It has a very favorable weekly chart. The weekly RSI is rising and isn't overbought. The weekly PMO has recently overcome the zero line and continues to rise. It is not at all overbought. The SCTR has reversed and is almost in the hot zone. I think this one could make new all-time highs, but for now look at a 15% upside target around $76.00.
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 50% long, 2% short. I like all of these for an add this week. We'll see.
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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