Thank you as always goes out to the subscribers who sent in reader requests today, but today I must say that the selections were all good. Of the symbols requested, there was only one that just didn't fit the mold. It was missing a rising PMO. So pat yourselves on the back for finding some great looking "Diamonds in the Rough".
The market is marching ever higher. I'm being reminded of the saying, "climbing the wall of worry". There are winners out there that are keeping the market moving higher. I would just like to see internals start to jibe with the rally to take some of my "worry" away.
Tomorrow is the Diamond Mine trading room! If you haven't joined us yet, we all invite you to join us live. If you can't attend, the recording will be available for download and review for two weeks.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": AROC, UBER and WU.
Other requests: SLG, MLYS, BBAR, AAL, TEX, LKFN, AER, ARCO, GENI, AMZN, GGAL, ONTF.
RECORDING & DOWNLOAD LINK (1/19/2024):
Topic: DecisionPoint Diamond Mine (1/19/2024) LIVE Trading Room
Recording & DownloadLINK
Passcode: January#19
REGISTRATION for 1/26/2024:
When: Jan 26, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (1/26/2024) 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 latest recording from January 22nd:
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.
Archrock, Inc (AROC)
EARNINGS: 02/20/2024 (AMC)
Archrock, Inc. engages in the provision of operations, maintenance, service and equipment for oil and natural gas production, processing, and transportation applications. It operates through the Contract Operations and Aftermarket Services. The Contract Operations segment includes the owned fleet of natural gas compression equipment that the company uses to provide operations services. The Aftermarket Services segment sell parts and components, and provides operations, maintenance, overhaul, and reconfiguration services to customers. The company was founded in 1954 and is headquartered in Houston, TX.
Predefined Scans Triggered: New 52-week Highs and Moved Above Upper Price Channel.
AROC is unchanged in after hours trading. It is currently at overhead resistance so we could see a small pullback before a breakout. The indicators look very favorable. The RSI is positive and not overbought and there is a new PMO Crossover BUY Signal above the zero line that suggests 'pure strength'. Stochastics did tip over which also speaks to a possible pullback first, but they remain above 80 suggesting internal price strength. The stop is set near the 50-day EMA around 7.2% or $14.84.
The only problem with the weekly chart is the overbought RSI, however it isn't a big problem given AROC has been experiencing overbought conditions since October of last year. The PMO looks especially bullish as it surges above the signal line. The StockCharts Technical Rank (SCTR) is at the top of the hot zone* above 70. Since it is at all-time highs, consider a 17% upside target to around $18.72.
*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.
Uber Technologies, Inc. (UBER)
EARNINGS: 02/07/2024 (BMO)
Uber Technologies, Inc. is a technology platform, which engages in the development and operation of technology applications, network, and product to power movement from point A to point B. The firm offers ride services and merchants delivery service providers for meal preparation, grocery and other delivery services. It operates through the following segments: Mobility, Delivery and Freight. The Mobility segment refers to products that connect consumers with Mobility Drivers who provide rides in a variety of vehicles, such as cars, auto rickshaws, motorbikes, minibuses, or taxis. The Delivery segment offers consumers to search for and discover local restaurants, order a meal, and either pick-up at the restaurant or have the meal delivered and, in certain markets, Delivery also includes offerings for grocery, alcohol and convenience store delivery and other goods. The Freight segment leverages proprietary technology, brand awareness, and experience revolutionizing industries to connect carriers with shippers on Uber's platform, and gives carriers upfront, transparent pricing and the ability to book a shipment. The company was founded by Oscar Salazar Gaitan, Travis Kalanick and Garrett Camp in 2009 and is headquartered in San Francisco, CA.
Predefined Scans Triggered: Elder Bar Turned Green, Moved Above Upper Keltner Channel, New 52-week Highs, Stocks in a New Uptrend (Aroon), Moved Above Upper Price Channel and P&F Double Top Breakout.
UBER is down -0.14% in after hours trading. I really liked price action here. We saw a breakout and then a pullback to the breakout point where it subsequently rallied. The RSI is positive and not yet overbought. The PMO is nearing a Crossover BUY Signal and Stochastics are oscillating above 80. Relative strength studies show that the group is clearly outperforming and UBER is outperforming the group and consequently the SPY. The stop is set between the 20/50-day EMAs at 7.3% or $61.18.
As with AROC, the only problem on the weekly chart is the overbought RSI. It has been overbought for some time and I think it will remain so for some time given the strongly positive indicators. The weekly PMO has surged above the signal line and continues higher. It is getting overbought, but doesn't look interested in reversing right now. The SCTR is at the top of the hot zone. Since it is also at new all-time highs, consider an upside target of about 17% to $77.22.
Western Union Co. (WU)
EARNINGS: 02/06/2024 (AMC)
The Western Union Co. is a holding company, which engages in the provision of money transfer and payment services. It operates through the following segments: Consumer-to-Consumer, Business Solutions, and Other. The Consumer-to-Consumer segment facilitates money transfers between two consumers. The Business Solutions segment offers payment and foreign exchange solutions, cross-border, and cross-currency transactions for small and medium size enterprises and other organizations and individuals. The Other segment consists of electronic-based and cash-based bill payment services. The company was founded in 1851 and is headquartered in Denver, CO.
Predefined Scans Triggered: Moved Above Upper Bollinger Band.
WU is up +0.56% in after hours trading. There was a recent breakout and price is holding above support. We have a new LT Trend Model BUY Signal as we had a "golden cross" of the 50/200-day EMAs. This puts WU in a bull market configuration. The RSI is positive and not at all overbought. The PMO is rising after a surge earlier this month. Stochastics are above 80 and rising. Relative strength is acceptable as all relative strength lines are either moving up or staying constant. You don't need to set a deep stop on this one. I've chosen 5.5% or $11.81.
I like the weekly chart. It suggests this could be a longer-term hold. The weekly RSI is in positive territory and is nowhere near overbought. The PMO gave us a Crossover BUY Signal above the zero line signaling pure strength. The SCTR could be better, but it is improving quickly and is at a fairly respectable 61.1%. It could have trouble at the next level of overhead resistance, but I'm counting on a breakout which is why upside potential is so high. It may take some time to get there.
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 70% 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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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