With the market acting weak and is overbought, I wasn't surprised to see very few requests. Of the requests I had to take some out simply because the PMO was starting back down. Consequently I had to run some scans to give us our third pick today.
One of the requests is a clear "boom or bust" stock in the very risky area of Renewable Energy, but I have to say it is shaping up and could get us some great upside. But, as the name implies, there is a high risk of a 'bust' so keep position sizes low if you test the water.
Tomorrow is the Diamond Mine trading room. It looks like it will be very interesting as the market decides whether it wants to resume the decline. You'll find registration information below the Diamonds logo.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": DAN, EPOL and PLUG.
Other requests: ARDX, YINN, DRV (presented REK recently so opted not to include this, but it looks good) and FRPT.
RECORDING & DOWNLOAD LINK (1/26/2024):
Topic: DecisionPoint Diamond Mine (1/26/2024) LIVE Trading Room
Recording & Download Link HERE
Passcode: January#26
REGISTRATION for 2/2/2024:
Topic: DecisionPoint Diamond Mine (2/2/2024) 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 29th. Click HERE to subscribe to the DecisionPoint YouTube Channel to be notified when new content is available.
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.
Dana Inc. (DAN)
EARNINGS: 02/21/2024 (BMO)
Dana, Inc. engages in the manufacture, distribution, and sale of technology drive and motion products, sealing solutions, thermal-management technologies, and fluid-power products. It operates through the following segments: Light Vehicle, Commercial Vehicle, Off-Highway, and Power Technologies. The Light Vehicle segment includes drivetrain systems and components for passenger cars, crossovers, sport utility vehicles, vans, and light trucks. The Commercial Vehicle segment consists of drivetrain and tire-pressure management systems, as well as genuine service parts for medium and heavy-duty commercial vehicles. The Off-Highway segment offers drivetrain systems and individual product solutions under the Spicer brand, and motion systems for associated machine working functions and stationary industrial equipment under the Brevini brand. The Power Technologies segment consists of sealing solutions and thermal management technologies for reducing fuel consumption and emissions. The company was founded by Clarence W. Spicer on April 1, 1904 and is headquartered in Maumee, OH.
Predefined Scans Triggered: Elder Bar Turned Green, New CCI Buy Signals and Moved Above Ichimoku Cloud.
DAN is unchanged in after hours trading. This pick is mine. Price is making its way higher and is now congregating above the 20/50-day EMAs. It has a good yield, but that is tempered by the negative P/E right now. The RSI is positive and not overbought. The PMO triggered a Crossover BUY Signal and Stochastics are edging higher above 80. Relative strength is working in DAN's favor. The stop is set arbitrarily at 7% or $13.02.
I like how price is rebounding off the bottom of a steady price range. The weekly RSI is nearly positive and there is a recent weekly PMO Crossover BUY Signal. The OBV is confirming the rally out of the October low. The StockCharts Technical Rank (SCTR) is well outside the hot zone*, but it is rising again. If it can reach the top of the trading range it would be a solid gain.
*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.
iShares MSCI Poland Capped ETF (EPOL)
EARNINGS: N/A
EPOL tracks a market-cap-weighted index of the broader Polish equity market. Click HERE for more information.
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, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
EPOL is down -1.60% in after hours trading so it is taking back some of today's big gain which isn't surprising. The RSI is positive and not overbought yet. There is a nearing PMO Crossover BUY Signal above the zero line. Stochastics have just moved above 80. We're seeing some excellent relative strength on EPOL. The OBV is also rising to confirm this current rally. The stop is set below support at 7% or $20.91.
Price is once again breaking out above the 2021 high. The weekly RSI is positive and not overbought. The weekly PMO has surged above the signal line and the SCTR is at the top of the hot zone. This could be considered a more intermediate-term investment not just a short-term trade. Consider an upside target of about 17% to $26.31.
Plug Power, Inc. (PLUG)
EARNINGS: 02/28/2024 (AMC)
Plug Power, Inc. provides alternative energy technology, which focuses on the design, development, commercialization, and manufacture of hydrogen and fuel cell systems used primarily for the material handling and stationary power markets. Its fuel cell system solution is designed to replace lead-acid batteries in electric material handling vehicles and industrial trucks for some distribution and manufacturing businesses. The company was founded by George C. McNamee and Larry G. Garberding on June 27, 1997, and is headquartered in Latham, NY.
Predefined Scans Triggered: P&F Spread Triple Top Breakout, Filled Black Candles and P&F Double Top Breakout.
PLUG is up +0.64% in after hours trading. Today did form a bearish filled black candlestick. Price is on overhead resistance so a pullback first before a breakout is probable. However, I do see a breakout in its future based on the strong looking PMO. It isn't above the zero line yet, but it is rising strongly suggesting strength. The OBV is confirming the rally with rising bottoms. Stochastics are now above 80. The group is performing in line with the market, but PLUG is outperforming the group and consequently the SPY. This is the 'boom or bust' stock. The stop is set at 7.4% or $4.35, but could be set deeper on this volatile stock. It is low-priced so position size wisely if you opt in.
The upside potential for this stock is incredible, but I doubt it will get that far. Still it doesn't need to travel far to get a good gain. The weekly RSI is negative, but rising. The weekly PMO has just triggered a Crossover BUY Signal. The SCTR is in the tank so this is a very risky short-term trade.
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 45% 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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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