Reader requests came in light today so I ran my scans and came up with some additions to the one request I'll be covering. I believe I found some good candidates that should hold up on a market pause. The reader request today is PANL, the other two are from my PMO Crossover Scan.
Don't forget that I do requests on Thursdays! Feel free to send in a handful if you're interested in my take.
I don't have a lot to add today so I'll let today's picks speak for themselves.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": MOH, PANL and PAYX.
Runners-up: LSPD, NVEI, ADP, MKTX, BRC and ONTO (Down on earnings tonight, but nice chart).
RECORDING LINK (11/3/2023):
Topic: DecisionPoint Diamond Mine (11/3/2023) LIVE Trading Room
Passcode: November#3
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When: Nov 10, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (11/10/2023) LIVE Trading Room
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Here is the last recording from 11/6:
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.
Molina Healthcare, Inc. (MOH)
EARNINGS: 02/07/2024 (AMC)
Molina Healthcare, Inc. engages in the provision of health care services. It operates through the following segments: Medicaid, Medicare, Marketplace, and Other. The company was founded by C. David Molina in 1980 and is headquartered in Long Beach, CA.
Predefined Scans Triggered: P&F Double Top Breakout.
MOH is up +0.23% in after hours trading. Today price formed a bullish engulfing candlestick that would imply tomorrow will be a positive day. Overhead resistance is arriving, but the indicators are ripe and ready. The RSI is in positive territory and there is a new PMO Crossover BUY Signal. Volume is steady based on the gently rising OBV. Stochastics are now above 80. Relative strength for the group is near-term in decline, but over the intermediate term it has been improving overall. MOH is performing very well against the group right now and is also outperforming the SPY. The stop is set at 7.4% or $326.29.
MOH has a healthy weekly chart suggesting it could be held past the short term. The weekly RSI is positive and not overbought. The weekly PMO has surged above the signal line and the StockCharts Technical Rank (SCTR) is within the hot zone* above 70. Since it is near all-time highs, consider a 17% upside target around $412.27.
*If a stock 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.
Pangaea Logistics Solutions Ltd. (PANL)
EARNINGS: 11/08/2023 (AMC) * Reported Yesterday *
Pangaea Logistics Solutions Ltd. engages in the provision of seaborne dry bulk logistics and transportation services to industrial customers worldwide. The firm services customers that require transportation of dry bulk cargoes, including grains, coal, iron ore, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite, and limestone. The company was founded by Edward Coll, Carl Claus Boggild, and Anthony Laura on April 29, 2014 and is headquartered in Newport, RI.
Predefined Scans Triggered: Elder Bar Turned Green, New CCI Buy Signals, Moved Above Upper Bollinger Band, Moved Above Ichimoku Cloud and Moved Above Upper Price Channel.
PANL is unchanged in after hours trading. I noticed a large cup with handle pattern on the daily chart, not to mention today's strong breakout. This one is related to yesterday's Dry Bulk Shipping ETF (BDRY) as PANL is in this industry. BDRY was up over 7% today so I suspect the group as a whole did very well. I would look for some follow through after a possible pullback to broken resistance. The RSI is positive, rising and not overbought. The PMO is accelerating higher on today's rally. Stochastics have reversed in positive territory. The one big detractor is that the group is not performing well, however, PANL is outperforming the group and consequently traveling in line with the SPY. Acceptable. The stop is set at the 200-day EMA at 8% or $5.84.
PANL has a very nice weekly chart and therefore you could consider it for an intermediate-term time horizon. The weekly RSI is positive and rising, not overbought. The weekly PMO has just turned back up and the SCTR is in the hot zone. It is pretty close to prior highs so you could consider a 17% upside target around $7.42.
Paychex, Inc. (PAYX)
EARNINGS: 12/21/2023 (BMO)
Paychex, Inc. engages in the provision of human capital management solutions for payroll, human resources, insurance and retirement for small and medium-sized businesses. Its solutions include payroll services, hiring services, business insurance, time and attendance, employee benefits, finance and payments, human resources services and startup services. The company was founded by Blase Thomas Golisano in 1971 and is headquartered in Rochester, NY.
Predefined Scans Triggered: None.
PAYX is unchanged in after hours trading. We a possible messy "V" Bottom pattern that would suggest we will see a breakout above the October highs. The RSI isn't positive, but a rally will fix that problem fairly quickly. There is a new PMO Crossover BUY Signal. Stochastics have risen into positive territory. The group is performing well against the SPY and PAYX is starting to show leadership based on its rising relative strength line. I've set the stop below support at 7.1% or $105.92.
This is a trading range stock and currently price is only about 1/3rd of the way up. Price reversed before testing the support line and that is bullish. The declining trend is still in place and we do see the weekly PMO is in decline on a SELL Signal. The SCTR is rising but is outside the hot zone. Keep this one in the short-term timeframe. Upside potential before hitting strong resistance is at 20%.
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 55% 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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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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