Thank you for your Reader Requests this week! I had only a few send them in, but two of them were requested by two different people. My understanding is that you have manipulated my Diamond PMO Scan (good for you!) and thus similar stock names are coming up. The stocks were GNK and LAMR.
Scans are an excellent way to narrow down your results and the workbench to create scans is pretty easy to use. I'll have to go over scan manipulation in tomorrow's trading room or on Monday in the free trading room.
Don't forget to register for tomorrow's Diamond Mine trading room! I look forward to seeing you there.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": ANF, GNK and LAMR.
Other requests: HWM, DGS, KURA, MRUS, TEVA, PFFA, DIBS and ARLO.
RECORDING & DOWNLOAD LINK (4/26/2024):
Topic: DecisionPoint Diamond Mine (4/26/2024) LIVE Trading Room
Recording & Download Link HERE.
Passcode: April#26
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When: May 3, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (5/3/2024) 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.
Abercrombie & Fitch Co. (ANF)
EARNINGS: 05/29/2024 (BMO)
Abercrombie & Fitch Co. engages in the retail of apparel, personal care products, and accessories. The firm operates through following geographical segments: Americas, EMEA and APAC. The Americas segment includes operations in North America and South America. The EMEA segment includes operations in Europe, the Middle East and Africa. The APAC segment includes operations in the Asia-Pacific region, including Asia and Oceania. The company was founded by David Abercrombie in 1892 and is headquartered in New Albany, OH.
Predefined Scans Triggered: Elder Bar Turned Green and New CCI Buy Signals.
ANF is up +0.08% in after hours trading. I have had my eye on this stock for awhile. It had a really nice run out of the October low and only recently began to correct. It has now formed a bullish falling wedge that implies an upside breakout ahead. The RSI is positive and not at all overbought. The PMO is rising off a Crossover BUY Signal. Stochastics did move below 80 so I'm hoping it won't need to pullback to the bottom of the pattern again. The group is underperforming, but ANF is outperforming the group well enough to continue to outpace the SPY. The stop is set below the 50-day EMA at 7.5% or $115.53.
There is a very large bull flag on the weekly chart. The weekly RSI is positive and not overbought and the StockCharts Technical Rank is at the top of the hot zone*. The weekly PMO is a problem currently, but it is decelerating on the recent rally. The flag formation implies a lot of upside, but for now I'd look toward a 17% target around $146.13.
*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.
Genco Shipping & Trading Ltd. (GNK)
EARNINGS: 05/08/2024 (AMC)
Genco Shipping & Trading Ltd. is an international ship owning company, which engages in the transportation of iron ore, coal, grain, steel products, and other drybulk cargoes. The company was founded on September 27, 2004 and is headquartered in New York, NY.
Predefined Scans Triggered: Moved Above Upper Keltner Channel, New 52-week Highs, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
GNK is down -1.89% in after hours trading. I like the breakout here from a bullish ascending triangle (flat top, rising bottoms). The RSI is overbought now so a small pullback may be in order, although the last time it was overbought, it didn't hurt the rally. The PMO had a Crossover BUY Signal well above the zero line. The group has been performing very well and GNK is outperforming the group and the SPY. The stop is set as close to the 50-day EMA as I could comfortably get at 7.7% or $20.46.
I spot a large double bottom pattern using the 2022 low and October low. The pattern was confirmed on the breakout above the confirmation line. The weekly RSI is overbought, but it has been for a few months. The weekly PMO is accelerating higher and the SCTR is in the hot zone. Consider a 17% upside target around $25.94.
Lamar Advertising Co. (LAMR)
EARNINGS: 05/02/2024 (BMO) ** Reported Today **
Lamar Advertising Co. engages in advertising services. The firm rents advertising space on billboards, buses, shelters, benches, logo plates, and in airport terminals. The company was founded in 1902 and is headquartered in Baton Rouge, LA.
Predefined Scans Triggered: Stocks in a New Uptrend (ADX) and Moved Above Upper Bollinger Band.
LAMR is unchanged in after hours trading. Earnings were received well today. It hasn't broken out yet, but if earnings were good, I do expect to see more upside follow through. The RSI is positive and rising. The PMO has given us a Crossover BUY Signal above the zero line. Stochastics are above 80. Relative strength for the group is okay as it is inline with the SPY. LAMR is a clear leader within the group and it is outperforming the SPY. The stop is set at support at 8% or $109.18.
This rally is coming off very strong support and it looks ready to break out. This could be considered an intermediate-term investment given the strength of the weekly chart. The weekly RSI is positive and not overbought. The weekly PMO is surging above the signal line and is well above the zero line. The SCTR is well within the hot zone above 70. Consider a 17% upside target around $138.86.
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 30% 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