Thank you to those who sent in Reader Requests. I apologize that not all of them can be covered. Two of today's selections take advantage of new strength in Utilities and Energy. I was happy to see these requests come across my screen today.
The Utilities ETF (XLU) was a request today. Since it was this week's Sector to Watch I didn't select it, but this sector is heating up (no pun intended) and with market weakness still a problem, it should continue to flourish.
The final selection is a Biotech which I hesitated to include given it is in a weaker area of the market, but the group itself is showing some outperformance. The chart was really nice and deserved attention today.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": AGIO, D and OKE.
Other requests: OMC, POST, POWL, UTZ, XLU, AM, IBKR, TDG, WM and EAT.
RECORDING & DOWNLOAD LINK (4/19/2024):
Topic: DecisionPoint Diamond Mine (4/19/2024) LIVE Trading Room
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When: Apr 26, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (4/26/2024) LIVE Trading Room
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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.
Agios Pharmaceuticals, Inc. (AGIO)
EARNINGS: 05/02/2024 (BMO)
Agios Pharmaceuticals, Inc. is a biopharmaceutical company, which engages in a research engine, multiple novels, and investigational therapies in preclinical development. It focuses on cellular metabolism and classical hematology. The company was founded by Lewis Clayton Cantley, Tak W. Mak, Craig B. Thompson and Shin-Shan Michael Su on August 7, 2007 and is headquartered in Cambridge, MA.
Predefined Scans Triggered: Stocks in a New Uptrend (ADX).
AGIO is unchanged in after hours trading. I liked this chart based primarily on the bullish reverse head and shoulders pattern that was confirmed with the recent breakout. The minimum upside target would have price challenging the February high. The RSI is positive and not overbought. The PMO is flat above the signal line and is on a Crossover BUY Signal that implies pure strength. Stochastics aren't quite to 80, but they are angling upward nonetheless. Relative strength is excellent with all three relative strength lines rising bullishly. The stop is set near the 50-day EMA at $29.19.
The weekly chart is favorable and should we see a breakout here, upside potential is excellent. The weekly RSI is positive and the weekly PMO is accelerating well above the zero line on a Crossover BUY Signal. The StockCharts Technical Rank (SCTR) is inside 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.
Dominion Energy, Inc. (D)
EARNINGS: 05/02/2024 (BMO)
Dominion Energy, Inc. engages in the production and distribution of energy. It operates through following business segments: Dominion Energy Virginia, Dominion Energy South Carolina, Contracted Energy, and Corporate and Other. The Corporate and Other segment focuses on corporate, service company, non-controlling interest in Dominion privatization, and non-regulated retail energy marketing operations. The company was founded by William W. Berry in 1983 and is headquartered in Richmond, VA.
Predefined Scans Triggered: P&F Double Top Breakout and P&F Bullish Triangle.
D is unchanged in after hours trading. I like the breakout from an intermediate-term trading range. It is in the hot Utilities sector. The RSI is positive and not overbought. The PMO is flat above the signal line and on a Crossover BUY Signal which suggests pure strength. Stochastics are above 80 and relative strength lines are rising sharply. The stop is set beneath the 200-day EMA at 6.5% or $47.65.
We have a nice reverse head and shoulders pattern on the weekly chart. This breakout is coming at very strong resistance that went back to 2020. The weekly RSI is positive and not overbought. The weekly PMO is rising strongly above the zero line and the SCTR is in the hot zone. I think it could move higher than the 16.7% I've marked, but this is a good place to reevaluate if it reaches it.
Oneok, Inc. (OKE)
EARNINGS: 04/30/2024 (AMC)
ONEOK, Inc. engages in gathering, processing, fractionating, transporting, storing and marketing of natural gas. It operates through the following segments: Natural Gas Gathering and Processing, Natural Gas Liquids and Natural Gas Pipelines. The Natural Gas Gathering and Processing segment offers midstream services to producers in North Dakota, Montana, Wyoming, Kansas and Oklahoma. The Natural Gas Liquids segment owns and operates facilities that gather, fractionate, treat and distribute NGLs and store NGL products, in Oklahoma, Kansas, Texas, New Mexico and the Rocky Mountain region, which includes the Williston, Powder River and DJ Basins, where it provides midstream services to producers of NGLs and deliver those products to the two market centers, one in the Mid-Continent in Conway, Kansas and the other in the Gulf Coast in Mont Belvieu, Texas. The Natural Gas Pipelines segment provides transportation and storage services to end users. The company was founded in 1906 and is headquartered in Tulsa, OK.
Predefined Scans Triggered: New 52-week Highs, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
OKE is unchanged in after hours trading. We have a breakout to new 52-week highs and it is in a very bullish segment of the market right now. This rally came right off support and the 50-day EMA. The RSI is positive and the PMO is nearing a Crossover BUY Signal. Stochastics are above 80. It may not be outperforming the group, but it is inline and the group is killing it. Consequently OKE is outperforming the SPY in a big way. The stop is set beneath support at 6.8% or $75.84.
I have only one problem with the weekly chart and that is the overbought RSI. However, I'll accept that given this strong breakout that implies even more upside. The weekly PMO is flat above the zero line and on a Crossover BUY Signal. The SCTR is in the hot zone. Consider an upside target of 17% near $95.21.
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 20% 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