I had quite a few stocks hit the scans today but I wasn't very impressed with them. What did impress me were the Energy choices. I believe Energy will continue to rise after its recent breakout. Crude Oil is rising and that will put the wind at the back of those stocks. Instead presenting four Energy stocks, I opted to present two. There are two more in the "runner-ups".
The other two are from the Financial sector which saw positive rotation yesterday when Tech failed. I'd be careful with the Tech stocks right now.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": C, ERIE, HES and XOM.
Runner-ups: AIT, CRVL, CMG, DVN, HLX and WEN (upside reversal candidate).
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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.
Citigroup, Inc. (C)
EARNINGS: 07/12/2024 (BMO)
Citigroup, Inc. is a holding company, which engages in the provision of financial products and services. It operates through the following segments: Global Consumer Banking, Institutional Clients Group, and Corporate and Other. The Global Consumer Banking segment provides traditional banking services to retail customers through retail banking, including commercial banking, and Citi-branded cards and Citi retail services. The Institutional Clients Group segment provides corporate, institutional, public sector and high-net-worth clients around the world with a full range of wholesale banking products and services. This segment includes fixed income and equity sales and trading, foreign exchange, prime brokerage, derivative services, equity and fixed income research, corporate lending, investment banking and advisory services, private banking, cash management, trade finance and securities services. The Corporate and Other segment includes certain unallocated costs of global staff functions, other corporate expenses and unallocated global operations and technology expenses, Corporate Treasury, certain North America and international legacy consumer loan portfolios, other legacy assets, and discontinued operations. The company was founded in 1812 and is headquartered in New York, NY.
Predefined Scans Triggered: Bullish MACD Crossovers.
C is down -0.24% in after hours trading. I like how the short-term declining trend was broken as price bottomed. If Financials are going to see rotation, this is a big name within and should benefit. The RSI just moved into positive territory. The PMO did turn up, but admittedly it looks a bit timid on this rally. Stochastics are rising in positive territory. The Banks group is beginning to show some outperformance against the SPY. Of late, C has been outperforming the group and the SPY. I have set the stop well below near-term support at 7.3% or $57.08.
The weekly chart needs help so consider this only in the short-term timeframe for now. The weekly RSI is positive and the StockCharts Technical Rank (SCTR) is in the hot zone*. Unfortunately, the weekly PMO has just triggered a Crossover SELL Signal which is why we need to exercise caution. I'm looking for a breakout, but even if it just gets to overhead resistance it is an over 16% gain.
*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.
Erie Indemnity Co. (ERIE)
EARNINGS: 07/25/2024 (AMC)
Erie Indemnity Co. engages in the insurance business and operates as an attorney-in-fact. It manages affairs at the Erie Insurance Exchange for the benefit of the policyholders. It covers policies in auto and leisure, home and property, life, and business insurance. The company was founded by Henry Orth Hirt and Ollie Grover Crawford on April 4, 1925, and is headquartered in Erie, PA.
Predefined Scans Triggered: Ichimoku Cloud Turned Green.
ERIE is unchanged in after hours trading. I like this reversal off horizontal support and the 200-day EMA. This is a beat down reversal candidate so we need to keep a close eye on it as it is getting ready to hit overhead resistance. It could stumble there, but given the indicators I'm looking for a breakout there. The RSI isn't yet in positive territory, but it is rising and is close. The PMO has just triggered a Crossover BUY Signal and Stochastics are rising strongly. Relative strength is picking up in all three indicator windows. The stop is set beneath support at 7.4% or $338.74.
Given the decline it previously experienced it isn't surprising to see the weekly PMO in decline. However, the weekly RSI just hit positive territory and the SCTR is on its way to the hot zone. If it can reach prior highs it would be an over 16% gain.
Hess Corp. (HES)
EARNINGS: 07/31/2024 (BMO)
Hess Corp is an exploration and production company, which engages in exploration, development, production, transportation, purchase & sale of crude oil, natural gas liquids and natural gas with production operations. It operates through the following segments: Exploration and Production and Midstream. The Exploration and Production segment explores for, develops, produces, purchases and sells crude oil, natural gas liquids and natural gas. The Midstream segment provides fee-based services including crude oil and natural gas gathering, processing of natural gas and the fractionation of natural gas liquids, transportation of crude oil by rail car, terminaling and loading crude oil and natural gas liquids, and the storage and terminaling of propane, primarily in the Bakken shale play of North Dakota. The company was founded by Leon Hess in 1920 and is headquartered in New York, NY.
Predefined Scans Triggered: None.
HES is up +0.01% in after hours trading. Price has broken from a bearish declining trend channel. Given the maturity of the indicators, I see far more upside for HES. The RSI is in positive territory and isn't at all overbought. There is a new PMO Crossover BUY Signal. Stochastics are rising strongly. Relative strength is improving for the group and HES right now. The stop is set beneath support at 6.8% or $139.70. It could be set deeper to account for a possible drop to the bottom of the declining trend channel.
Given the extended decline, the weekly PMO turned south, but I expect that to clear up when this rally gets going. The SCTR is not in the hot zone. I would like to see more movement out of it before I go into this longer-term. The weekly RSI looks very good as it has just entered positive territory. I would consider a 17% upside target to $175.38.
Exxon Mobil Corp. (XOM)
EARNINGS: 07/26/2024 (BMO)
Exxon Mobil Corp. engages in the exploration, development, and distribution of oil, gas, and petroleum products. It operates through the following segments: Upstream, Downstream and Chemical. The Upstream segment produces crude oil and natural gas. The Downstream segment manufactures and trades petroleum products. The Chemical segment offers petrochemicals. The company was founded by John D. Rockefeller in 1882 and is headquartered in Spring, TX.
Predefined Scans Triggered: None.
XOM is down -0.05% in after hours trading. Here we have another breakout from a declining trend channel. The rebound is also coming off the 200-day EMA. The RSI has just entered positive territory. The PMO is in the process of triggering a Crossover BUY Signal. Stochastics are rising strongly and relative strength is picking up for XOM and the industry group. This is from this week's Industry Group to Watch. The stop is set beneath support and toward the bottom of the trend channel at 7% or $106.36.
The weekly chart is shaping up given the weekly RSI has reentered positive territory and the SCTR is very close to the hot zone. The weekly PMO is on a Crossover SELL Signal so we need to keep this one in the short-term timeframe for now. Consider a 17% upside target around $133.81.
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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 "Under the Hood" 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 45% 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.
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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)
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