"Diamonds in the Rough" fared well this afternoon and finished on average up +0.22% while the SPY's week ended down -1.55%. It wasn't looking that good in this morning's Diamond Mine. Remember you have two weeks to download the recording.
The "Darling" this week was Metlife Inc (MET) which was up +2.33% since being picked on Tuesday. It looks good moving forward. The "Dud" this week was Avidity Biosciences (RNA) which was down -1.93% since being picked yesterday. It looks a bit precarious but we'll discuss that later.
The Sector to Watch was clearly Utilities (XLU) which is showing a new PMO Crossover BUY Signal. I did look at two Industry Groups within and found both Multiutilities and Conventional Electricity and ultimately picked Conventional Electricity. One reason I picked it was that when ran the scans at the end of the program, two additional symbols came up from that group. Multiutilities saw SRE and AGR as possible buys.
Speaking of the scans, I ran a few scans, but the PMO Bullish Crossover Scan offered the most choices. While they weren't all good, I did pick out: AMR, FE, LNT, T and RNR as stocks to review.
Have a great weekend!
Good Luck & Good Trading,
Erin
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.
Our latest DecisionPoint Trading Room recording (12/18, no recordings for 12/25 or 1/1):
A few items about the spreadsheet: I've put on the spreadsheet whether the RSI is positive (green) or negative (red). The PMO column tells you if it is rising (green) or falling (red). Finally I've added my own "Sparkle Factor" that gives you my assessment going forward, bullish (green), bearish (red) or neutral (gray). The Sparkle Factor is basically my thoughts on whether I expect it to rise or fall. A neutral means it could really go either way so it could be added to a watch list. If you're in a stock I consider "neutral" going forward, the ball is in your court.
Darling:
Metlife, Inc. (MET)
EARNINGS: 01/31/2024 (AMC)
MetLife, Inc. provides insurance and financial services to individual and institutional customers. It offers life insurance, annuities, automobile and homeowner's insurance and retail banking services to individuals as well as group insurance, reinsurance and retirement and savings products and services. The firm operates through the following segments: U.S., Asia, Latin America, EMEA, MetLife Holdings and Corporate & Other. The U.S. segment offers a broad range of protection products and services aimed at serving the financial needs of customers throughout their lives. The U.S. segment is organized into three businesses: Group Benefits, Retirement and Income Solutions and Property & Casualty. The Asia segment offers a broad range of products to individuals and corporations, as well as other institutions and their respective employees, which include whole life, term life, variable life, universal life, accident & health insurance, fixed and variable annuities and endowment products. The Latin America segment offers a broad range of products to individuals and corporations, as well as other institutions and their respective employees, which include life insurance, accident & health insurance, credit insurance and retirement and savings products. The EMEA segment offers a broad range of products to individuals and corporations, as well as other institutions and their respective employees, which include life, accident & health, credit insurance and retirement and savings products. The MetLife Holdings segment consists of operations relating to products and businesses, such as variable, universal, term and whole life insurance, variable, fixed and index-linked annuities, long-term care insurance, as well as the assumed variable annuity guarantees. The Corporate & Other segment contains the excess capital, as well as certain charges and activities, not allocated to the segments. The company was founded on March 24, 1868 and is headquartered in New York, NY.
Predefined Scans Triggered: Elder Bar Turned Green, New CCI Buy Signals and P&F Double Top Breakout.
Below are the commentary and chart from Tuesday, 1/2:
"MET is down -0.58% in after hours trading. Today saw a nice breakout from a congestion area. This does have the look of a Bull Flag and this breakout could be signaling another leg up. The RSI is positive and not overbought. The PMO is rising after a recent Crossover BUY Signal. Stochastics turned up in positive territory and are headed to territory above 80. The group has been performing in line with the SPY but it is starting to outperform again. MET is a clear leader within the group and is just beginning to outperform the SPY on its own. The stop is set beneath the 50-day EMA around 5.9% or $63.37."
Here is today's chart:
The only problem for Metlife right now is the overbought RSI, but based on July, the RSI can hold overbought conditions if necessary. The PMO is not overbought yet and Stochastics just moved above 80. I like MET moving forward. We did notice an 'insurance' theme in today's scan results.
Don't forget, on Thursdays I look at reader-requested symbols, so shoot me an email at erin@decisionpoint.com. I read every email I receive and try to answer them all!
Dud:
Avidity Biosciences Inc. (RNA)
EARNINGS: 02/27/2024 (AMC)
Avidity Biosciences, Inc. engages in the development of a new class of oligonucleotide-based therapies called Antibody Oligonucleotide Conjugates (AOC). It utilizes its AOC platform to design, engineer, and develop therapeutics that combine the tissue selectivity of monoclonal antibodies and the precision of oligonucleotide-based therapies in order to access previously undruggable tissue and cell types and more effectively target underlying genetic drivers of diseases. The company was founded by Troy E. Wilson, Kent Hawryluk, Mark E. Davis, and Francis Patrick McCormick on November 13, 2012 and is headquartered in San Diego, CA.
Below are the commentary and chart from yesterday, 1/4:
"RNA is unchanged in after hours trading. We have a nice cup-shaped basing pattern. Today price closed on the 200-day EMA. This comes after a breakout above resistance. The RSI is getting overbought, but it has flirted with this territory for well over a month. The PMO is definitely overbought which takes some of the shine off the pick, but it does appear it has surged above the signal line and could move even higher. Relative strength is excellent across the board. The stop is set as deep as I felt comfortable at 7.9% or $9.84."
Here is today's chart:
It had a bad day and is struggling beneath overhead resistance at the 200-day EMA. I don't think the chart has gone completely south, but it worries me enough to mark it with a "neutral" Sparkle Factor. The primary reason is the toppy looking PMO. Everything else looks good, it just seems like momentum is beginning to weaken. This is a hold or a risky buy.
THIS WEEK's Performance:
DecisionPoint Market Scoreboard (Mechanical Trend Model Signals):
Friday's signal changes are outlined in purple.
Click Here to view Carl's annotated "Under the Hood" ChartList!
Sector to Watch: Utilities (XLU)
XLU is showing new momentum which is what attracted me to the chart. Certainly, XLV and XLP look good, but momentum was not new. Participation is also very strong beneath the surface as their are 90% holding above their 20/50-day EMAs and 90% with silver crosses. I suspect the market will continue to struggle and that should offer these defensive sectors opportunities to rally as money rotates there.
Industry Group to Watch: Conventional Electricity ($DJUSVE)
Right now price is up against overhead resistance, but indicators are positive enough to look for a breakout. The RSI is positive and Stochastics are rising strongly. You'll also notice that we have outperformance. Volume is also steadily improving based on the OBV. Symbols that we uncovered in the Diamond Mine this morning: ETR, OGE, FE and LNT.
Go to our Under the Hood ChartList on DecisionPoint.com to get an in-depth view of all the sectors. On StockCharts.com you can find the Industry Summary.
Good Luck & Good Trading!
- Erin
erin@decisionpoint.com
Full Disclosure: I'm 75% long, 0% short.
Watch the latest episode of the DecisionPoint Trading Room with Carl & Erin Swenlin on Mondays 3:00p EST!
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
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 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 selection of "diamonds in the rough."
Helpful DecisionPoint Links:
DecisionPoint Shared ChartList and DecisionPoint Chart Gallery
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
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