Thank you to all that sent in Reader Requests. All of them had promise, but I had to narrow it down to just three for today.
Requests came primarily from the Healthcare and Technology sectors. I didn't pick a Healthcare stock, but I did choose two Tech stocks. Three of the requests came from the Software group and I selected two of them.
One of them is part of the HACK ETF I presented yesterday, Fortinet (FTNT). One that I'm not presenting is Palo Alto Networks (PANW) primarily due to how overbought and hot the rally is running. I thought FTNT was a better choice.
I opted to present Uranium (URA) as yesterday both URA and URNM were on the "Runner-ups" list so obviously I like them.
Tomorrow is the Diamond Mine trading room so don't forget to sign up! Recordings are available for download and viewing for two weeks.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": FTNT, JAMF and URA.
Other requests: OSCR, NVST, EPIX, ACET, CCJ, ITGR, PANW and ZETA.
RECORDING & DOWNLOAD LINK (1/5/2024):
Topic: DecisionPoint Diamond Mine (1/5/2024) LIVE Trading Room
Recording and download link HERE.
Passcode: January#5
REGISTRATION for 1/12/2024:
When: Jan 12, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (1/12/2024) 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 recording link for 1/5 (not posted to YouTube this week, link expires in two weeks):
Passcode: January#8
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.
Fortinet Inc. (FTNT)
EARNINGS: 02/06/2024 (AMC)
Fortinet, Inc. provides cybersecurity solutions to a variety of businesses, such as enterprises, communication service providers and small businesses. It operates through the following segments: Network Security, Infrastructure Security, Cloud Security, and Endpoint Protection, Internet of Things and Operational Technology. The Network Security segment includes the majority of product sales from its FortiGate network security appliances. The Infrastructure Security segment provides a platform, which is an architectural approach that protects the entire digital attack surface, including network core, endpoints, applications, data centers and private and public clouds. Together with its network of Fabric-Ready Partners, the Fortinet Security Fabric platform enables disparate security devices to work together as an integrated, automated, and collaborative solution. The Cloud Security segment provides help to customers to connect securely to and across their cloud environments by offering security through its virtual firewall and other software products in public and private cloud environments. The Endpoint Protection, Internet of Things and Operational Technology segment includes the proliferation of Internet of Things (IoT) and an Operational Technology (OT). IoT and OT have created an environment where data moves freely between devices across locations, network environments, remote offices, mobile workers and public cloud environments, making the data difficult to consistently track and secure. The company was founded by Ken Xie and Michael Xie in October 2000 and is headquartered in Sunnyvale, CA.
Predefined Scans Triggered: Moved Above Upper Bollinger Band and P&F Double Top Breakout.
FTNT is down -0.24% in after hours trading. Price has been moving steadily upward. The 20/50-day EMA crossover sets it up with a bullish IT bias. We're waiting on the 50-day EMA to overtake the 200-day EMA to move the stock into a bull market configuration. It looks like we will see more upside follow-through based on the positive RSI and Stochastics above 80. The PMO had a recent surge above the signal line and relative strength studies are positive. The stop is set between the 20/50-day EMAs at 7.4% or $57.64.
I really like the weekly chart. The weekly RSI is positive and not at all overbought. The weekly PMO is triggering a Crossover BUY Signal. The StockCharts Technical Rank (SCTR) isn't in the hot zone yet, but it is rising vertically. Should it reach the 2021 high, it would be an over 21% gain. I don't think all-time highs are out of the question either.
*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.
Jamf Holding Corp. (JAMF)
EARNINGS: 02/27/2024 (AMC)
Jamf Holding Corp. engages in the provision of Apple infrastructure and security platform of scale. It helps organizations including businesses, hospitals, schools and government agencies to connect, manage, and protect Apple products, applications, and corporate resources in the cloud even without touching the device. The company was founded in 2002 and is headquartered in Minneapolis, MN.
Predefined Scans Triggered: Moved Above Upper Keltner Channel, Moved Above Upper Bollinger Band, Stocks in a New Uptrend (Aroon), Moved Above Upper Price Channel and P&F Double Top Breakout.
JAMF is up +1.43% in after hours trading. Today saw a great breakout on a strong rally. This one is off to the races. I don't think it is too late on this one primarily because the RSI isn't that overbought yet. The PMO is on a new Crossover BUY Signal. Stochastics are now above 80. Relative strength for the group and the stock is excellent. The stop is set below the 200-day EMA at 6.9% or $18.27.
The weekly chart suggests this could be good in the intermediate term. The weekly RSI is positive and not overbought. The weekly PMO is on a Crossover BUY Signal and is accelerating higher on this week's hot rally. The SCTR is nearly in the hot zone and rising vertically. It may struggle when it hits $22.50, but I expect a breakout there eventually that would lead to a possible 41% gain.
Global X Uranium ETF (URA)
EARNINGS: N/A
URA tracks a market-cap-weighted index of companies involved in uranium mining and the production of nuclear components.
Predefined Scans Triggered: Moved Above Upper Keltner Channel, New 52-week Highs and P&F Double Top Breakout.
URA is up +1.50% in after hours trading. The rally has kicked into gear. Yesterday I didn't include URA due to the bearish filled black candlestick. Apparently that wasn't a problem. The breakout looks great and new 52-week highs are being made. The RSI is positive and not yet overbought. The PMO has just generated a Crossover BUY Signal and Stochastics are above 80 rising strongly. This ETF has been outperforming the market this year. The stop is set halfway down the prior trading range at 6.1% or $27.59.
It's been a good week for URA with a nice pop above overhead resistance. Unfortunately, the weekly RSI is overbought, but it can hold this condition based on 2021 and given this strong breakout, I think it will. The weekly PMO is surging above the signal line (bottom above the signal line) and the SCTR couldn't be much higher. Consider a 17% upside target to $34.39.
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 75% 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