I always enjoy Reader Request Day as it brings symbols to the table that I may not be familiar with. It also shows me that subscribers are learning and watching as these symbols suit my analysis process.
Today turned up some good symbols, but none of them had everything going for them, there were some imperfections. However, with the market holding a bullish bias and seasonal trading looking healthy, I don't think we need our charts to be "perfect".
You'll see that the imperfections are really minor for the most part. As I often say, relative strength isn't a make or break for me. Overbought RSIs aren't great, but we know that a stock in a strong uptrend can hold those overbought conditions almost indefinitely.
I'll see tomorrow for the Diamond Mine trading room! Registration information is below. Remember, if you can't attend, you can download the videos before they go away 2 weeks later.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": MQ, MRNA and YELP.
Other requests: AI, AUTL, TNK, WFRD, FRO and DELL.
** IMPORTANT **
I was asked if there would be cancellations of the Diamond Mine trading room for the holidays. The Fridays don't land on holidays so I'm planning on hosting the Diamond Mine without fail this holiday season. The free DecisionPoint Trading Room will not meet on December 25th or January 1st, so our next free trading room will be January 8th.
RECORDING LINK (12/15/2023):
Topic: DecisionPoint Diamond Mine (12/15/2023) LIVE Trading Room
Passcode: December#15
REGISTRATION for 12/22/2023:
When: Dec 22, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (12/22/2023) 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 12/18:
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.
Marqeta Inc. (MQ)
EARNINGS: 02/27/2024 (AMC)
Marqeta, Inc. engages in the creation of a digital payment technology. The firm develops a modern card issuing platform, providing infrastructure and tools for building configurable payment cards. It provides its customers issuer processor services and also acts as a card program manager. The company was founded by Jason M. Gardner in 2010 and is headquartered in Oakland, CA.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
MQ is down -0.14% in after hours trading. I really liked the breakout and mechanical pullback yesterday. Today's rally was strong, I only wish it had formed a higher high for complete confirmation. There are two problems on the chart. One is the industry group isn't performing well. Second is topping Stochastics. Relative strength isn't make or break and Stochastics are still reading above 80, they're just really close to breaking below. I can overlook the problems given the breakout, PMO rising on a BUY Signal and positive RSI that is not overbought. I've set the stop at the 20-day EMA around 7.6% or $6.39. It is low-priced so position size wisely.
I had to move this chart into log scale to see recent price action more clearly. The indicators are excellent on the weekly chart which makes it easier to forgive the imperfections noted above. The weekly RSI is positive, rising and not overbought. The PMO is rising strongly above the zero line and is also not overbought. The StockCharts Technical Rank (SCTR) is in the hot zone* above 70 suggesting IT and LT internal strength. I don't know that you'll get 82% to the upside, but it should rise and provide a good profit.
*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.
Moderna Inc. (MRNA)
EARNINGS: 02/22/2024 (BMO)
Moderna, Inc. engages in the development of transformative medicines based on messenger ribonucleic acid (mRNA). Its product pipeline includes the following modalities: prophylactic vaccines, cancer vaccines, intratumoral immuno-oncology, localized regenerative therapeutics, systemic secreted therapeutics, and systemic intracellular therapeutics. The company was founded by Noubar B. Afeyan, Robert S. Langer, Jr., Derrick J. Rose and Kenneth R. Chien in 2010 and is headquartered in Cambridge, MA.
Predefined Scans Triggered: Elder Bar Turned Green, Moved Above Upper Bollinger Band and Moved Above Ichimoku Cloud.
MRNA is up +0.31% in after hours trading. I've kept an eye on MRNA through the trading rooms as it seems to be a popular request. The chart has really firmed up, but I really wish I'd gotten involved in this one on the PMO Crossover BUY Signal. The one imperfection on this chart is relative strength of the Pharma group is declining. Totally forgivable if it's outperforming the SPY, which it is. The RSI is positive, rising and not overbought. The PMO is rising above the zero line suggesting pure strength. (We want the PMO rising above the zero line for this reason). Stochastics are rising after reversing in positive territory, meaning internal strength. I've set the stop near the 50-day EMA at 7.9% or $83.95.
The weekly PMO is rising, though in negative territory. There is a new weekly PMO Crossover BUY Signal. MRNA has been beat down so we unfortunately have a SCTR in the basement. That could improve quickly, particularly if MRNA can reach its prior trading range.
Yelp Inc. (YELP)
EARNINGS: 02/08/2024 (AMC)
Yelp, Inc. engages in the business of operating a community-driven platform that connects people with great local businesses. The company was founded by Jeremy Stoppelman and Russell Simmons in July 2004 and is headquartered in San Francisco, CA.
Predefined Scans Triggered: Moved Above Upper Keltner Channel, New 52-week Highs, Moved Above Upper Price Channel, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
YELP is up +0.08% in after hours trading. I liked the breakout on YELP, that is what really attracted me. The two imperfections on this chart would be the now overbought RSI (which I forgive as it looks like it can stay overbought without issue based on last July) and diminishing relative strength of the group. As noted previously, as long as it is outperforming the SPY, I'll forgive a group stumble. Stochastics are above 80. The stop is set between the 20/50-day EMAs around 7.4% or $44.67.
I like the weekly chart. All is going well so this could be considered a more intermediate-term investment rather than just a short-term trade. The weekly RSI is positive and not yet overbought. The weekly PMO has turned up and is nearing a Crossover BUY Signal. The SCTR is well within the hot zone. I spotted a bull flag, actually slightly better than a flag. The actual flag was a bearish descending triangle. Instead of a breakdown we got a breakout which is especially bullish. Consider a 17% upside target to about $56.44.
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 85% 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
(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