This week "Diamonds in the Rough" performed well and that is saying something given the market's decline. Part of the success was driven by two hedges that I presented on ETF Day.
The spreadsheet hadn't been updated for over two weeks and it was clear that the market was failing as winning positions soon were stopped out. It is an excellent example of why we need to trade with the market trend. When I left the trend was up. When I returned things had begun to fall apart which is why last week's picks didn't turn out as well as I liked. You'll also notice that many stocks hit their stop levels through this decline.
This week's Sector to Watch was Utilities (XLU) which is the only one with rising momentum currently. Consumer Staples (XLP) was a close second. We are seeing a nice rebound on price and improved participation. Utilities still look stronger in my opinion.
The Industry Group to Watch is Conventional Electricity. This group is set up well and we did find plenty of symbols to consider within: NEE, ETR, MGEE, AEP and SO.
This week's "Darling" was AMERISAFE (AMSF) which was up +4.16%. It is from the Insurance area of the market and those groups are beginning to reawaken. Hamilton Insurance Group (HG) came in second, up +4.00%.
The "Dud" this week was Oscar Health (OSCR) which was down -2.67% today. The chart still looks constructive.
I ran two scans at the end of the trading room that included my Diamond Dog Scan that looks for shorts. The shorts that I have in mind are: AAPL, FSLY and PODD.
The Momentum Sleepers Scan came up with some good selections as well on the buy side: CNP, INVA, NWN, PM and SR.
Have a great weekend! See you in the free DecisionPoint Trading Room on Monday at Noon ET!
Good Luck & Good Trading,
Erin
(P.S. Some of our subscribers reported trouble logging in. If you ever have this problem, notify support@decisionpoint.com as soon as you are able so we can clear it up.)
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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Below is the latest free DecisionPoint Trading Room recording from 4/15. You'll find these recordings posted on Mondays to our DP YouTube Channel. Be sure and subscribe HERE.
A few items about the spreadsheet: I've put on the spreadsheet whether the RSI is positive (green) or negative (red). The PMO column tells you if it is rising (green) or falling (red). Finally I've added my own "Sparkle Factor" that gives you my assessment going forward, bullish (green), bearish (red) or neutral (gray). The Sparkle Factor is basically my thoughts on whether I expect it to rise or fall. A neutral means it could really go either way so it could be added to a watch list. If you're in a stock I consider "neutral" going forward, the ball is in your court.
Darling:
AMERISAFE, Inc. (AMSF)
EARNINGS: 04/24/2024 (AMC)
AMERISAFE, Inc. engages the provision of workers' compensation insurance focused on small to mid-sized employees. The firm covers the construction, trucking, logging and lumber, agriculture, manufacturing, telecommunications, and maritime industries. The company was founded by Millard E. Morris in 1985 and is headquartered in DeRidder, LA.
Predefined Scans Triggered: Elder Bar Turned Green, Bullish MACD Crossovers and P&F High Pole.
Below are the commentary and chart from Tuesday, 4/16:
"AMSF is unchanged in after hours trading. I like this reversal that occurred well above support. It is now above overhead resistance. The RSI is negative but rising. The PMO is curling upward toward a Crossover BUY Signal. It is below the zero line so it should be looked at as diminishing weakness right now. A Crossover BUY Signal would show strength. Stochastics do suggest higher prices ahead. Relative strength is beginning to pick up for the group. AMSF was already outperforming. The stop is set near support at 7.7% or $45.08."
Here is today's chart:
As noted in the opening the Insurance space is looking very bullish right now and could be fueling a new rally for Financials (XLF). The chart has matured and best of all despite this strong rally, the RSI is not yet overbought. This tells me there is more upside ahead for AMSF.
Don't forget, on Thursdays I look at reader-requested symbols, so shoot me an email at erin@decisionpoint.com. I read every email I receive and try to answer them all!
Dud:
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.
Below are the commentary and chart from Thursday, 4/18:
"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 $15.13."
Here is today's chart:
This one has only been on the list for one day and it happened to have a bad one. It really hasn't compromised the chart in my opinion. The PMO is still rising above the zero line and the RSI is positive. Stochastics don't look too good so we may see a handle put on this cup, but for now the rising trend is intact. It's a Dud but I think it still has promise.
THIS WEEK's Performance:
DecisionPoint Market Scoreboard (Mechanical Trend Model Signals): 
Friday signal changes are outlined in purple.
Click Here to view Carl's annotated "Under the Hood" ChartList!
Sector to Watch: Utilities (XLU)
As noted in the opening XLU is the only sector with a rising PMO. New momentum may be arriving for Consumer Staples (XLP), but XLU is already on the pathway to success. The PMO has bottomed well above the zero line indicating pure strength. Notice the incredible increase in participation of stocks above their 20/50/200EMAs. Stochastics are rising and relative strength is excellent.
Industry Group to Watch: Conventional Electricity ($DJUSVE)
The group is beginning to take off just like the sector itself is. The RSI is positive and the PMO has turned up. Stochastics are rising vertically and relative strength is off the charts right now. A few symbols to consider in this group: NEE, ETR, MGEE, AEP and SO.
Go to our Under the Hood ChartList on DecisionPoint.com to get an in-depth view of all the sectors. On StockCharts.com you can find the Industry Summary.
Good Luck & Good Trading!
- Erin
erin@decisionpoint.com
Full Disclosure: I'm 80% long, 0% short.
Watch the latest episode of the DecisionPoint Trading Room with Carl & Erin Swenlin on Mondays 3:00p EST!
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
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 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 selection of "diamonds in the rough."
Helpful DecisionPoint Links:
DecisionPoint Shared ChartList and DecisionPoint Chart Gallery
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
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