The market gave us a nice bounce today. I wouldn't get too comfortable however, as the internals of the market are still weak at best.
I liked every reader request today which was good since there weren't that many sent in. Don't forget to put yours in to me. It's a great opportunity to test yourself on picking good charts as well as an opportunity to have me look at one of your portfolio positions. Just make sure you get them in by Thursday morning.
I had some stops hit today and I opted not to get into a hedge, but that is my next plan of action. Keep your stops in play and don't talk yourself into a bad position. It is usually better to cut those losses before things get out of hand. Certainly you can still opt to go in on the long side, but just know we are in risk off environment.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": CAMT, DKNG and INMD.
Other requests: SPOT, DBX, WMG and PSN.
RECORDING & DOWNLOAD LINK (1/12/2024):
Topic: DecisionPoint Diamond Mine (1/12/2024) LIVE Trading Room
Recording & Download Link HERE.
Passcode: January#12
(Expires 1/26/2024)
REGISTRATION for 1/19/2024:
When: Jan 19, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (1/19/2024) 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.
Camtek Ltd. (CAMT)
EARNINGS: 02/15/2024 (BMO)
Camtek Ltd. engages in the development and manufacturing of inspection and metrology equipment for the semiconductor industry. It offers services to the semiconductor market segments, including Advanced Packaging, Memory, CMOS Image Sensors, Power, RF and MEMS, serving the industry's global IDMs, OSATs, and foundries. Its products include front-end, mid-end, post dicing, panes, automatic defect classification, and compass. The company was founded in 1987 and is headquartered in Migdal Haemek, Israel.
Predefined Scans Triggered: New 52-week Highs, Moved Above Upper Bollinger Band, Moved Above Upper Price Channel, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
CAMT is up +1.28% in after hours trading. Price just keeps marching higher even with some market hesitation. The RSI is getting overbought, but I noticed that CAMT doesn't usually have a problem holding overbought conditions. It's making new 52-week highs. The PMO is on Crossover BUY Signal that took place well above the zero line so this looks like returning strength. Stochastics are now above 80. I wasn't thrilled with the performance of the industry group, but CAMT is outperforming it by a mile and so consequently is beating the SPY. I've set the stop beneath support at 7.2% or $70.85.
We have more overbought conditions on the weekly chart, but as with the daily chart, we can see that the RSI can hold overbought territory for some time. The weekly PMO is rising after a surge above the signal line. The StockCharts Technical Rank (SCTR) is at the very top of the hot zone*. I would consider at least a 17% upside target to around $89.32.
*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.
DraftKings Inc (DKNG)
EARNINGS: 02/15/2024 (AMC)
DraftKings, Inc. is a digital sports entertainment and gaming company, which engages in the provision of online sports betting, online casino, daily fantasy sports product offerings, DraftKings Marketplace, retail sportsbook, media, and other consumer product offerings. The company was founded by Jason D. Robins, Matthew Kalish, and Paul Liberman on December 31, 2011 and is headquartered in Boston, MA.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Keltner Channel, Moved Above Upper Bollinger Band, Moved Above Ichimoku Cloud, Moved Above Upper Price Channel, Runaway Gap Ups and P&F Low Pole.
DKNG is up +0.27% in after hours trading. Today saw a big breakaway gap (or at least that is how I am reading it. The problem with gaps is that you don't know what kind of gap it is until after the fact). It could turn out to be a bearish reverse island, but I don't see that given the double bottom pattern that would imply more upside is possible. The RSI is positive and the PMO is nearing a Crossover BUY Signal above the zero line. The OBV is confirming the rally. Relative strength is picking up for the industry group this week and DKNG is seeing some great outperformance (today's 7%+ move helped). The stop is set below gap support at 7.1% or $34.87.
The weekly chart suggests this could be an intermediate-term investment not just a short-term trade. The weekly RSI is positive, rising and is not overbought. The weekly PMO has just turned up well above the zero line. The SCTR is well within the hot zone. I've set upside potential to halfway up the next trading range.
InMode Ltd. (INMD)
EARNINGS: 02/13/2024 (BMO)
InMode Ltd. designs, develops, manufactures and markets minimally-invasive aesthetic medical products. It also designs, develops, manufactures and markets non-invasive medical aesthetic products that target a array of procedures including permanent hair reduction, facial skin rejuvenation, wrinkle reduction, cellulite treatment, skin appearance and texture and superficial benign vascular and pigmented lesions. The company was founded by Moshe Mizrahy and Michael Kreindel on January 2, 2008 and is headquartered in Yokneam, Israel.
Predefined Scans Triggered: Bullish MACD Crossovers, P&F High Pole and Entered Ichimoku Cloud.
INMD is down -0.48% in after hours trading. I hesitated with this one as it can be classified as "boom or bust". With a risk off environment, consider a very small position if you have the risk appetite. This looks like a good reversal off a bullish double bottom. Price closed above the 50-day EMA on a strong rally. The RSI is now in positive territory and there is a new PMO Crossover BUY Signal. Volume does appear to be coming in on the current rally. Stochastics are early in their move to 80 and are in positive territory. The industry group continues to outperform the market. INMD is just now starting to show a little outperformance. The stop is set arbitrarily at 7.3% or $21.22.
The weekly chart tells me this is for the very short-term timeframe. The weekly RSI is negative and the SCTR is in the basement. The PMO is currently rising, but is mostly flat. I would look for a move to resistance, but a breakout is possible for the 'boom' on the stock.
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 65% 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