Thank you to those that submitted Reader Requests for today. They came in pretty light. I noticed a definite skew toward growth areas like Technology and Consumer Discretionary. Given the market appears ready to reignite, these aggressive areas may not be a problem. I opted to go with all Technology today.
I did run my scans as well today and they did have quite a preponderance of Technology and Discretionary stocks within. One of the symbols I would classify as "boom or bust" and it definitely has my eye for a very small position.
Tomorrow is the Diamond Mine trading room! Be sure and register or plan on downloading the video tomorrow evening.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": AVGO, CYBR and MSTR.
Other Requests: NEM, VRT, HCA, HL, TOL, NVR, JACK, FFIV and IBM.
RECORDING & DOWNLOAD LINK (5/10/2024):
Topic: DecisionPoint Diamond Mine (5/10/2024) LIVE Trading Room
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Passcode: May#10th
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When: May 17, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (5/17/2024) LIVE Trading Room
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Here is the latest recording from 5/13. 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.
Broadcom Inc. (AVGO)
EARNINGS: N/A
Broadcom Inc. is a global technology company, which designs, develops, and supplies semiconductors and infrastructure software solutions. It operates through the Semiconductor Solutions and Infrastructure Software segments. The Semiconductor Solutions segment refers to product lines and intellectual property licensing. The Infrastructure Software segment relates to mainframe, distributed and cyber security solutions, and the FC SAN business. The company was founded in 1961 and is headquartered in Palo Alto, CA.
Predefined Scans Triggered: New 52-week Highs, Stocks in a New Uptrend (ADX) and P&F Double Top Breakout.
AVGO is down -0.17% in after hours trading. Yesterday saw a breakout to new 52-week highs. It is coming out of a trading range. I have looked at the Semiconductors (SMH) under the hood chart and I like what I see coming from this industry group. You can see that it is already outperforming. The RSI is positive and not overbought and the PMO is rising on a Crossover BUY Signal above the zero line. Stochastics are staying above 80. Relative strength shows AVGO has a leadership role within the group right now. The stop is set near the 50-day EMA at 7.4% or $1307.63.
The weekly chart suggests this could be considered for an intermediate-term investment given the weekly PMO has turned back up and the weekly RSI is positive and not overbought. It also helps that the StockCharts Technical Rank (SCTR) is at the top of the hot zone* above 70. Consider a 17% upside target to about $1652.19.
*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.
CyberArk Software Ltd. (CYBR)
EARNINGS: 08/08/2024 (BMO)
CyberArk Software Ltd. engages in the development, market, and sale of access security software solutions. The firm's products include Privilege, Access, and DevSecOps. It offers its products and services to banking, insurance, healthcare, and federal industries. The company was founded by Udi Mokady and Alon Cohen in 1999 and is headquartered in Petah Tikva, Israel.
Predefined Scans Triggered: None.
CYBR is unchanged in after hours trading. I liked the double bottom setup. It hasn't been confirmed yet, we'll need a breakout above the confirmation line. It appears on its way as it is back above the 50-day EMA. I like that it isn't overbought, the RSI just moved positive. The PMO is on a new Crossover BUY Signal and Stochastics are rising strongly. Relative strength is rising for both the group and CYBR against the SPY. I've set the stop beneath the prior low at 7.8% or $225.64.
The only problem on the weekly chart is the weekly PMO which is still in decline. It will take more upside to erase the damage done by the drop from all-time highs. In the meantime, the weekly RSI is positive and the SCTR has now moved into the hot zone. It appears this one is ready to make its way back up to the all-time highs.
MicroStrategy Inc. (MSTR)
EARNINGS: 07/30/2024 (AMC)
MicroStrategy, Inc. engages in the provision of enterprise analytics and mobility software. The firm designs, develops, markets, and sells software platforms through licensing arrangements and cloud-based subscriptions and related services. Its product packages include Hyper. The company was founded by Michael J. Saylor and Sanjeev K. Bansal on November 17, 1989, and is headquartered in Vienna, VA.
Predefined Scans Triggered: Bearish Harami.
MSTR is up +0.51% in after hours trading. The reverse head and shoulders pattern is what immediately caught my eye on this one. We do have a bearish harami candlestick today, but given its up in after hours trading, I don't think there is a problem. Today's decline does make it interesting for an add here. It basically broke out and then pulled back to the breakout point which I find bullish. The RSI is positive and not overbought. There is a brand new PMO Crossover BUY Signal. Stochastics are rising above 80. Relative strength lines are all rising. The stop is set near the 20-day EMA at 7.6% or $1330.54.
The weekly chart is strengthening. We already have a SCTR at the top of the hot zone. The weekly RSI is rising and in positive territory. The weekly PMO has bottomed above the signal line. Definitely would describe this one as boom or bust. Tread carefully.
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, 0% short. I like MSTR.
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