I only had three Reader Requests today and I decided to pick only one of them. Two of the three were overbought based on the RSI so I wasn't comfortable presenting them. But I need three symbols so I opted to run my scans and see what I could find.
Clearly Banks had a good day as they were all over the scans. I gave you Citigroup (C) on Tuesday and I decided to include another Bank today.
The market was mostly uneventful today. I still believe we are in for a decline coming up but, I am not ready to short yet. My strategy right now is to let my positions ride with tighter stops. I'll let the market take me out.
NVDA is on the chopping block for me and honestly given the PMO SELL Signal on the chart, it wouldn't be a bad idea to step away for a week or two. At this point it is rebounding somewhat so I'm hoping to sell into strength. If I'm wrong about it, I can always get back in. I think Semiconductors will be under pressure in the next week or two. A rising Dollar hasn't helped.
I'll see you in the Diamond Mine trading room tomorrow! Remember that you can always download the video for two weeks after they go up.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": AROC, GEO and IBOC.
Other requests: CVNA and EXG. My runner-up: BKH.
RECORDING & DOWNLOAD LINK (6/21/2024):
Topic: DecisionPoint Diamond Mine (6/21/2024) LIVE Trading Room
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Topic: DecisionPoint Diamond Mine (6/28/2024) LIVE Trading Room
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Below is the latest free DecisionPoint Trading Room recording from 6/24. You'll find these recordings posted on Mondays to our DP YouTube Channel. Be sure and subscribe HERE.
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.
Archrock, Inc (AROC)
EARNINGS: 07/29/2024 (AMC)
Archrock, Inc. engages in the provision of operations, maintenance, service and equipment for oil and natural gas production, processing, and transportation applications. It operates through the Contract Operations and Aftermarket Services. The Contract Operations segment includes the owned fleet of natural gas compression equipment that the company uses to provide operations services. The Aftermarket Services segment sell parts and components, and provides operations, maintenance, overhaul, and reconfiguration services to customers. The company was founded in 1954 and is headquartered in Houston, TX.
Predefined Scans Triggered: New CCI Buy Signals.
AROC is down -0.55% in after hours trading. I still like the Energy trade. On this reader requested stock we have a confirmed double bottom chart pattern that implies more upside ahead as the minimum upside target hasn't quite been reached. Remember it is a 'minimum' upside target so price could rally past that and given the indicators it should. The RSI is positive and not overbought. The PMO is rising on a Crossover BUY Signal and should get above the zero line shortly. Stochastics are reading above 95 which shows internal price strength. Relative strength studies are positive with all windows showing outperformance. The stop is set beneath support at 7.9% or $18.43.
I don't like the rounded top on the weekly chart, but we do see a strong rally this week on support. The weekly RSI looks good, but the weekly PMO needs help. The StockCharts Technical Rank (SCTR) is within the hot zone* above 70 so the outlook in the intermediate term isn't terrible. Keep this in the short-term timeframe until the weekly PMO turns up. Consider a 17% upside target around $23.42.
*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.
GEO Group, Inc. (GEO)
EARNINGS: 08/07/2024 (BMO)
The GEO Group, Inc. engages in the design, financing, development, and support services for secure facilities, processing centers, and community re-entry facilities. It operates through the following segments: U.S. Secure, Electronic Monitoring and Supervision, Reentry, and International Services. The U.S. Secure Services segment encompasses the United States-based public-private partnership corrections and detention business. The Electronic Monitoring and Supervision Services segment conducts its services in the U.S. The Reentry Services Segment consists of various community-based and reentry services. The International Services segment consists of public-private partnership secure services operations in Australia and South Africa. The company was founded by George C. Zoley in 1984 and is headquartered in Boca Raton, FL.
Predefined Scans Triggered: Bullish MACD Crossovers.
GEO is down -1.93% in after hours trading so a better entry could be available tomorrow. I really like the big double bottom pattern that suggests a minimum upside target all the way to $18.50. The RSI just entered positive territory and the PMO is rising toward a Crossover BUY Signal. Stochastics are rising strongly. The group is holding its own, but GEO is showing outperformance against both the group and the SPY. The stop is a little deep and could be slightly deeper to put it below support. It's set at 8% or $12.42.
The weekly chart shows a bounce off very strong support here. The weekly RSI is positive and not overbought. The weekly PMO is on a Crossover SELL Signal, but it is already decelerating. The SCTR is well within the hot zone above 70. I'm looking for at least a test of overhead resistance, but remember the upside target of the double bottom would imply a move to $18.50.
International Bancshares Corp. (IBOC)
EARNINGS: 08/01/2024
International Bancshares Corp. is a financial holding company, which provides banking services for commercial, consumer, and international customers of South, Central, and Southeast Texas and the State of Oklahoma. It engages in the business of banking, including the acceptance of checking and savings deposits and the making of commercial, real estate, personal, home improvement, automobile and other installment and term loans. It also offers other related services, such as credit cards, travelers' checks, safety deposit, collection, notary public, escrow, drive-up and walk-up facilities and other customary banking services. The company was founded in 1966 and is headquartered in Laredo, TX.
Predefined Scans Triggered: P&F High Pole.
IBOC is unchanged in after hours trading. I liked today's breakout above the 50-day EMA. You could make a case for a short-term double bottom too. The RSI is just now getting positive and the PMO is nearing a Crossover BUY Signal. Stochastics are rising toward 80. Relative strength for Banks is beginning to pick up a bit. IBOC is starting to outperform the group so it is showing leadership. It is also outperforming the SPY. The stop is set at the 200-day EMA, but you could tighten that up if you prefer. I've set it at 8% or $51.77.
I like that price is rebounding before having to test the 43-week EMA or support at the 2022 high. That bodes well. Unfortunately, the weekly PMO is still in decline. I'd keep it in the short-term timeframe for now. We do at least see a positive weekly RSI and at least the SCTR is nearing the hot zone. This looks like a stock in transition on the weekly chart. Consider a 17% upside target to about $65.85.
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 "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.
"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)
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