Reader Requests were sparse today which didn't surprise me because my scans were nearly empty. I decided to do two reader requests and I added a shorting candidate that I pulled from my Diamond Dog Scan.
Remember when I do my shorting charts, the stop is set upward from price and the price target is below price. I've listed the chart as "SHORT" so there is no mistaking it for a long. I basically look for the same characteristics as on the buy side, but in inverse. For example, I want to see Stochastics near or below 20, not 80.
I will be reopening the Diamond Mine tomorrow so be sure to register and come in to make new friends or visit with current friends. It is very informal.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": NKE, OSCR and YELP (Short).
RECORDING & DOWNLOAD LINK (3/29/2024):
Topic: DecisionPoint Diamond Mine (3/29/2024) LIVE Trading Room
Recording & Download LINK
Passcode: March#28
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When: Apr 19, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (4/19/2024) 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.
Nike Inc. (NKE)
EARNINGS: 06/27/2024 (AMC)
NIKE, Inc. engages in the design, development, marketing, and sale of athletic footwear, apparel, accessories, equipment, and services. It operates through the following segments: North America, Europe, Middle East & Africa, Greater China, Asia Pacific & Latin America, Global Brand Divisions, Converse, and Corporate. The North America, Europe, Middle East & Africa, Greater China, and Asia Pacific & Latin America segments refer to the design, development, marketing, and selling of athletic footwear, apparel, and equipment. The Global Brand Divisions represent its NIKE Brand licensing businesses. The Converse segment designs, markets, licenses, and sells casual sneakers, apparel, and accessories. The Corporate segment consists of unallocated general and administrative expenses. The company was founded by William Jay Bowerman and Philip H. Knight on January 25, 1964, and is headquartered in Beaverton, OR.
Predefined Scans Triggered: P&F Low Pole.
NKE is down -0.19% in after hours trading. This subscriber requested NKE at the beginning of the week so kudos for riding this rally if you got in. There could be a pullback when resistance is met or just before which would offer a good entry if you want to wait it out. The RSI just moved into positive territory and the PMO is showing new strength on its oversold Crossover BUY Signal. Stochastics are now above 80 and relative strength is completely working in its favor right now. I've set the stop beneath support at 7.5% or $88.55.
It is very early, but we could be seeing the development of a bullish double bottom pattern. If it can reach the confirmation line it would be a 28% gain, but the pattern implies even more upside from there. Again, it is early so that is why I've listed upside potential where I have. The weekly chart isn't that favorable otherwise with the exception of a decelerating weekly PMO. Other than that we have a negative RSI and a StockCharts Technical Rank (SCTR) well below the hot zone*. Keep this short-term for the time being.
*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.
Oscar Health Inc. (OSCR)
EARNINGS: 05/07/2024 (BMO)
Oscar Health, Inc. is a health insurance company, which serves its customers through a technology platform. It offers individual and family, small group and medicare advantage plans, and technology platform to others within the provider and payor space. The company was founded by Mario Tobias Schlosser, Kevin Nazemi, and Joshua Kushner on October 25, 2012 and is headquartered in New York, NY.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, Moved Above Ichimoku Cloud, Moved Above Upper Price Channel and P&F Double Top Breakout.
OSCR is up +0.30% in after hours trading. I liked this chart best. We have a nice basing pattern leading into this rally. It is vulnerable to forming a "handle" on this cup, but that is guaranteed. The indicators are looking very good. The RSI is positive and not yet overbought. The PMO has turned up and crossed over while above the zero line indicating pure strength. Stochastics are oscillating above 80 indicating internal price strength. Relative strength is improving for the group. OSCR is a leader against the group and is consequently outperforming the SPY. The stop is set along prior highs at 8% or $15.13.
This looks like a breakout from a bull flag formation. If the pattern is correct, we will see a move the height of the flagpole that would get it back toward IPO highs. For now I've conservatively marked upside potential to 16%, but it could go higher. The weekly PMO is a problem, but if the rally gets going it will surge above the signal line. The weekly RSI is positive and the SCTR is at the top of the hot zone.
Yelp Inc. (YELP) - SHORT
EARNINGS: 05/09/2024 (AMC)
Yelp, Inc. engages in the business of operating a community-driven platform that connects people with great local businesses. The company was founded by Jeremy Stoppelman and Russell Simmons in July 2004 and is headquartered in San Francisco, CA.
Predefined Scans Triggered: Moved Below Ichimoku Cloud and Bearish MACD Crossovers.
YELP is unchanged in after hours trading. This is your shorting opportunity. Notice that price broke down from its rising trend and both the 20/50-day EMAs topped below the 200-day EMA. Price topped out before hitting overhead resistance which is also bearish. The PMO is headed lower and should move below the zero line soon. Stochastics look terrible as the fall vertically in negative territory. The group is failing miserably against the SPY. While Yelp isn't completely underperforming, it isn't really outperforming either. I've listed the stop at 6.2% or $41.85.
The weekly chart shows a breakdown below support. The weekly RSI topped in negative territory. The weekly PMO is in decline on a Crossover SELL Signal. The SCTR is not in the hot zone. Downside potential is excellent at 34.6%.
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 40% long, 5% 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