I always enjoy Reader Request Day as I like to see what symbols are crossing your computer screens. You also do me a favor by doing the initial culling of symbols so I only have to review what is sent in. We had quite a few requests and I was able to find one from three different people.
I noticed Materials and Energy had a good showing. I selected one from each. The third comes from the Consumer Discretionary sector, a Home Improvement retailer, not one of the big two either.
The rally is persistent and I probably should be adding to my portfolio to take advantage, but those niggling negative divergences are keeping me cautious. If you open any new positions, be sure they have stops set in case this rally finally deflates.
Tomorrow is the Diamond Mine trading room! Would love to see some new faces as we tease out symbols that could be potential candidates for next week. Every symbol request will be covered. Registration can be done using the link under the Diamonds logo.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": CENX, HCC and RH.
Other requests: IONQ, FCX, AA, DCPH, OMGA, VMD, NXE, PBF, AER and BVN.
RECORDING & DOWNLOAD LINK (3/1/2024):
Topic: DecisionPoint Diamond Mine (3/1/2024) LIVE Trading Room
Recording & Download LINK
Passcode: March#1st
REGISTRATION for 3/8/2024:
When: Mar 8, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (3/8/2024) 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 3/4. 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.
Century Aluminum Co. (CENX)
EARNINGS: 05/08/2024 (AMC)
Century Aluminum Co. is a producer of aluminum and operates aluminum reduction facilities, or smelters, in the United States and Iceland. Its products include standard ingots, T-ingot, extrusion billet, horizontal direct chill ingot, molten, slab, and sow. The company was founded in 1995 and is headquartered in Chicago, IL.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, Moved Above Ichimoku Cloud and Moved Above Upper Price Channel.
CENX is up +0.26% in after hours trading. Price has been in a trading range, but is now starting to wake up as it heads toward overhead resistance. The RSI is positive and not at all overbought yet. We have a new PMO Crossover BUY Signal that occurred above the zero line. Stochastics are rising toward 80 and I like relative strength. This stock tends to take a leadership role and given the Aluminum group is beginning to take off, this should be a good choice. There was another Aluminum stock requested, but this one had the PMO above the zero line. The stop is set beneath the 20-day EMA at 7.9% or $10.48.
I didn't annotate it, but I see a bull flag leading into this current rally that is breaking the declining trend of the flag itself. That is a confirmation of the pattern. The pattern calls for a move to the next level of overhead resistance, but I'd be happy with a move that was only halfway to that target. The weekly RSI is positive and not overbought and the weekly PMO is beginning to show some acceleration above the signal line. The StockCharts Technical Rank (SCTR) is well within the hot zone* above 70.
*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.
Warrior Met Coal Inc. (HCC)
EARNINGS: 05/01/2024 (AMC)
Warrior Met Coal, Inc. engages in the production and export of metallurgical coal. It is a U.S.-based, environmentally and socially minded supplier to the global steel industry and dedicated entirely to mining non-thermal steelmaking coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia. The company was founded on September 3, 2015 and is headquartered in Brookwood, AL.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, Moved Above Upper Price Channel, P&F Double Top Breakout and P&F Triple Top Breakout.
HCC is unchanged in after hours trading. I saw a textbook reverse head and shoulders on this chart and couldn't resist given yesterday's rally confirmed the pattern. The minimum upside target of the pattern would take price to about $67.00. This is a nice setup given the new PMO Crossover BUY Signal. The RSI is also not at all overbought so it can accommodate much more upside. Stochastics have moved above 80. As with CENX it may not be outperforming the group at the moment, but it is a leader in this space. It is doing very well against the SPY and the group is really getting going. The stop was set arbitrarily at 7% or $57.03.
I really like how price is rebounding off support. In fact it didn't need to go all the way down to support before turning back up and that is bullish. The weekly RSI is not overbought. The weekly PMO is currently on a Crossover SELL Signal, but I am noticing that the weekly PMO is decelerating and could form a bottom this week. Price is still 13% away from resistance, I would set an upside target around 17% or $71.76.
RH (RH)
EARNINGS: 03/27/2024 (AMC)
RH operates as a holding company which operates the business through its subsidiary Restoration Hardware, Inc. It offers furniture, lighting, textiles, bath ware, decor, outdoor and garden, as well as baby and child products. The company operates an integrated business with multiple channels of distribution including galleries, source books and websites. The company was founded by Stephen J. Gordon in 1980 and is headquartered in Corte Madera, CA.
Predefined Scans Triggered: Elder Bar Turned Green and Entered Ichimoku Cloud.
RH is up +0.23% in after hours trading. We have a somewhat complex reverse head and shoulders that is also forming a nice base for price to rally from. The reverse head and shoulder upside target would put price nearly at the next level of overhead resistance. The RSI is positive and not overbought. The weekly PMO is accelerating somewhat away from its signal line on a Crossover BUY Signal. Stochastics are in positive territory and have reversed higher. The group could be performing better near-term, but in general it is still on a rising trend. RH is slowly beginning to outperform. The stop is set just above the next support level at 7.5% or $253.79.
The weekly chart shows a trading range and price could be headed to the top. The only problem with the weekly chart is the low SCTR value, but this is primarily due to the previous decline. It should perk up again soon, but nonetheless keep this in the short-term timeframe for now. The weekly RSI just entered positive territory and the weekly PMO is on a Crossover BUY Signal. It is flat above the zero line, but not high enough to look at this as pure strength.
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 60% long, 0% short. I'll likely be expanding my portfolio tomorrow with any of this week's Diamonds in the Rough or symbols that we pull from the trading room tomorrow.
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 Mondays on the DecisionPoint 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