Thank you to those who sent in reader requests today, all two of you! I know the schedule change likely had an effect on getting them in a day early. I like today's choices, but two of them don't have good weekly charts. Typically when this happens, I let you know to keep the selection in the short-term timeframe. I prefer when they jibe with the daily charts, but if you're looking at a reversal play, the weekly charts are guaranteed to be weak.
One of the selections that I didn't pick today was Gold Miner, Alamos Gold (AGI). I like the Miners and this one is a winner, but it was up almost 7% today and will likely experience a pullback. I still think it has plenty of upside potential, it just ran too hot today for inclusion.
Don't forget that the Diamond Mine trading room is tomorrow and not Friday. Be sure to sign up!
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": AMGN, COHU and FSS.
Other requests: FDX, INZY and AGI.
RECORDING & DOWNLOAD LINK (3/22/2024):
Topic: DecisionPoint Diamond Mine (3/22/2024) LIVE Trading Room
Recording & DownloadLink
Passcode: March#22
REGISTRATION for 3/28/2024 (THURSDAY):
When: Mar 28, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (3/28/2024) LIVE Trading Room
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Here is the latest recording from 3/25. 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.
Amgen, Inc. (AMGN)
EARNINGS: 05/02/2024 (AMC)
Amgen, Inc. is a biotechnology company, which engages in the discovery, development, manufacture, and marketing of human therapeutics. It operates through Human Therapeutics segment. The company was founded by William K. Bowes, Jr., Franklin Pitcher Johnson, Jr., George B. Rathmann, and Joseph Rubinfeld on April 8, 1980 and is headquartered in Thousand Oaks, CA.
Predefined Scans Triggered: Moved Above Upper Price Channel and Moved Above Upper Bollinger Band.
AMGN is up +0.05% in after hours trading. This is probably my favorite of the bunch today. I really like the recent rally that has taken out the declining trend. We even have a small breakout above resistance at the October top. The RSI is not overbought and the PMO is rising on an oversold Crossover BUY Signal. Stochastics are now above 80 and still rising. Biotechs have not been performing well, but it appears they may be turning the corner. AMGN is already outperforming the SPY. The stop was set beneath support at 6.4% or $267.97.
I'm not liking the weekly chart so much, but this recent breakout does look encouraging for the intermediate term. The weekly RSI did just hop into positive territory. The weekly PMO is decelerating somewhat, but ultimately is still declining. The StockCharts Technical Rank (SCTR) is very low and outside the hot zone* above 70. However, it is rising now. I would look for a test of all-time highs.
*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.
Cohu, Inc. (COHU)
EARNINGS: 05/02/2024 (AMC)
Cohu, Inc. engages in the provision of back-end semiconductor equipment and services. It offers test and handling capital equipment, interface products, and related services to the semiconductor and electronics manufacturing industries. The company was founded in 1947 and is headquartered in Poway, CA.
Predefined Scans Triggered: P&F Double Bottom Breakdown, Elder Bar Turned Green, Bullish MACD Crossovers, P&F Bearish Triangle and Parabolic SAR Buy Signals.
COHU is down -1.29% in after hours trading. It may not be an exciting Semiconductor, but I think COHU's luck may be changing with this powerful rally. This is probably my least favorite due to relative strength against the group. It could be better than it is. There is a big bullish falling wedge on the chart that favors an upside breakout. The RSI just moved into positive territory. The PMO has just seen a positive Crossover BUY Signal. Stochastics are in negative territory, but are rising. The group is certainly outperforming which is why I'd prefer COHU were outperforming. It is starting to see some outperformance against the group and the SPY so it is acceptable. I've set the stop at 7.4% or $30.05.
The weekly chart says that this should stay in the short-term timeframe. The weekly RSI is negative and the weekly PMO is declining on a Crossover SELL Signal. The declining trend doesn't look so appetizing on the weekly chart, but remember it is at least forming a bullish wedge. The SCTR is well outside the hot zone. If it can get going there is plenty of upside potential.
Federal Signal Corp. (FSS)
EARNINGS: 05/02/2024 (BMO)
Federal Signal Corp. engages in the design and manufacture of products and integrated solutions for municipal, governmental, industrial, and commercial customers. It operates through the Environmental Solutions Group and Safety and Security Systems Group segments. The Environment Solutions Group segment is involved in the manufacture and supply of street sweeper vehicles, sewer cleaners, vacuum loader trucks, hydro-excavation trucks, and water blasting equipment. The Safety and Security Systems Group segment offers comprehensive systems and products that law enforcement, fire rescue, emergency medical services, campuses, military facilities, and industrial sites use to protect people and property. The company was founded in 1901 and is headquartered in Oak Brook, IL.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Keltner Channel, Moved Above Upper Bollinger Band and P&F Double Top Breakout.
FSS is unchanged in after hours trading. I liked today's breakout from a petite bull flag. That's what sold me on the chart. The RSI is rising in positive territory. There is a PMO Crossover BUY Signal above the zero line. Stochastics are flat above 80. Relative strength studies are very bullish with all relative strength lines rising nicely. The stop is set beneath the 50-day EMA at 6.9% or $78.70.
The weekly chart looks very good with the exception of a now overbought weekly RSI. I'm okay with this given it has hovered in overbought territory since around November. The weekly PMO is surging above the signal line (or bottoming above the signal line). The SCTR is well within the hot zone. Consider an upside target of about 17% to $98.91.
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 need to expand my portfolio. All of this week's Diamonds are on my radar. We'll see if we can tease out some more selections in tomorrow's Diamond Mine.
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