Two of today's selections come from the Materials sector (XLB) which I chose as the Sector to Watch this week. I like how the charts are shaping up.
I had quite a few results today to sift through so there are plenty of runner-ups. That should keep you very busy as it did for me!
I also included a Financial stock. That sector is soaring and should continue to given earnings season is upon us and so many are reporting right now.
The final sector was Utilities of all things. I had quite a few Utility stocks come up which makes me wonder if investors are hedging their bets on this current rally.
Don't forget Thursday is Reader Request Day, I'd love to see some new faces in my email box!
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": MTX, PRG, SO and WLK.
Runner-ups: CW, DHR, DOCN, VLTO, RTX, CACI, BDC, AVT, AMCR, APOG, SEE, ASH and SWX.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (7/12/2024):
Topic: DecisionPoint Diamond Mine (7/12/2024) LIVE Trading Room
Download & Recording LINK
Passcode: July#12th
REGISTRATION for 7/19/2024:
When: July 19, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine LIVE Trading Room
Register in advance for this webinar HERE.
After registering, you will receive a confirmation email containing information about joining the webinar.
Below is the latest free DecisionPoint Trading Room recording from 7/15. 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.
Minerals Technologies Inc. (MTX)
EARNINGS: 2024-07-25 (AMC)
Minerals Technologies, Inc. is a resource and technology-based company. It develops, produces, and markets a range of mineral, mineral-based, and synthetic mineral products. It operates through the Consumer and Specialties and Engineered Solutions segments. The Consumer and Specialties segment serves consumer end markets directly and provides mineral-based solutions and technologies that are essential to customers' products. The Engineered Solutions segment combines all engineered systems, mineral blends, and technologies that are designed to aid in customer processes and projects. The company was founded on February 19, 1968 and is headquartered in New York, NY.
Predefined Scans Triggered: Moved Above Upper Keltner Channel, New 52-week Highs, Stocks in a New Uptrend (ADX), Moved Above Upper Bollinger Band, Moved Above Upper Price Channel, P&F Double Top Breakout and P&F Bearish Signal Reversal.
MTX is down -5.04% in after hours trading so a better buy point should be available, but it also tells us to use caution regarding entry. I picked this before seeing after hours trading. I really liked today's breakout move and the new PMO Crossover BUY Signal that accompanied it. The RSI is getting a bit overbought but it seems to do fine with that based on history. Stochastics are above 80 and relative strength studies are bullish. I've set the stop beneath the 50-day EMA at 7.8% or $81.72.
This is an excellent breakout above long-term overhead resistance. It looks ready to establish a new trading range. The weekly RSI is overbought right now, but it has been in a bull market move. The weekly PMO is on a Crossover BUY Signal and appears to be surging or bottoming above the signal line. The StockCharts Technical Rank (SCTR) is in the hot zone above 70*. Consider a 17% upside target to $103.71.
*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.
PROG Holdings, Inc. (PRG)
EARNINGS: 2024-07-24 (BMO)
PROG Holdings, Inc. engages in the provision of lease-purchase solutions. It offers retail sale and lease ownership of furniture, home appliances, consumer electronics, and accessories through its franchised stores and e-commerce platform. It operates through the following segments: Progressive Leasing, Vive, and Four. The Progressive segment offers lease-to-own ownership of durable goods. The Vive segment provides services to customers who may not qualify to purchase goods and services from merchants. The Four segment includes provision of credit backgrounds with Buy Now, Pay Later "BNPL". The company was founded in 1955 and is headquartered in Draper, UT.
Predefined Scans Triggered: Elder Bar Turned Green, Bullish MACD Crossovers and Entered Ichimoku Cloud.
PRG is unchanged in after hours trading. We have a nice "V" Bottom pattern that implies we will see a breakout above the June top. The RSI just entered positive territory and the PMO is rising toward a Crossover BUY Signal. Stochastics are rising out of negative territory. Relative strength is picking up for both the industry group and PROG. I've set the stop below the 200-day EMA at 7.4% or $32.35.
I like the steady rising trend on PRG. We're seeing a bounce off the 43-week EMA and a reversing weekly PMO. The weekly RSI is not overbought. The SCTR is outside the hot zone, but it is rising right now. I like the upside potential should it reach the next level of overhead resistance.
Southern Co. (SO)
EARNINGS: 2024-08-01 (BMO)
The Southern Co is a holding company, which engages in the generation and sale of electricity. It operates through the following segments: Traditional Electric Operating Companies, Southern Power, and Southern Company Gas. The Traditional Electric Operating Companies segment refers to vertically integrated utilities that own generation, transmission and distribution facilities, and supplies electric services in the states of Alabama, Georgia, Florida, and Mississippi. The Southern Power segment constructs, acquires, owns, and manages generation assets such as renewable energy projects and sells electricity in the wholesale market. The Southern Company Gas segment distributes natural gas through natural gas distribution facilities in the states of Illinois, Georgia, Virginia, New Jersey, Florida, Tennessee, and Maryland. The company was founded on November 9, 1945, and is headquartered in Atlanta, GA.
Predefined Scans Triggered: Moved Above Upper Price Channel, P&F Double Top Breakout, Moved Above Upper Keltner Channel and New 52-week Highs.
SO is up +0.10% in after hours trading. I liked the new breakout from the trading range on an established rally. It does mean the RSI is getting overbought, but historically it can maintain that condition. The PMO is on a new Crossover BUY Signal and Stochastics are above 80. The OBV is also rising to confirm the rally. The group is performing in line with the SPY which is okay given it is in a rising trend. SO is outperforming the SPY and is now showing incredible leadership among its peers. I like that I don't have to set a very deep stop. I chose 6.5% or $75.84.
SO is making all-time highs coming out of a bullish flag formation. The weekly RSI is not yet overbought and the weekly PMO is accelerating higher. The SCTR is outside the hot zone, but it's not that far. Consider a 17% upside target to about $94.91.
Westlake Chemical Corp. (WLK)
EARNINGS: 2024-08-01 (BMO)
Westlake Corp. Is a global diversified industrial company, which engages in the manufacturing and supplying of essential products. It operates through the Performance and Essential Materials, and Housing and Infrastructure Products segments. The Performance and Essential Materials segment includes Westlake North American Vinyls, Westlake North American Chlor-alkali and Derivatives, Westlake European and Asian Chlorovinyls, Westlake Olefins, Westlake Polyethylene, and Westlake Epoxy. The Housing and Infrastructure Products segments refers to the Westlake Royal Building Products, Westlake Pipe and Fittings, Westlake Global Compounds, and Westlake Dimex. The company was founded by Ting Tsung Chao in 1986 and is headquartered in Houston, TX.
Predefined Scans Triggered: P&F Low Pole.
WLK is up +0.48% in after hours trading. Price has reversed out of a bearish double top and has broken out above the 50-day EMA. The RSI just entered positive territory. We have a new PMO Crossover BUY Signal and Stochastics are rising strongly toward 80. Relative strength is starting to look up for both the group and the stock. The stop is set beneath support at 7.4% or $138.32.
Price is reversing off a very important line of support. I would still keep this in the short term versus the intermediate term because the weekly PMO is still in decline. The weekly RSI is in positive territory, but unfortunately the SCTR is outside of the hot zone. That double top looks a bit dangerous, but this near-term reversal does imply the pattern will be busted. Consider a 17% upside target to $174.77.
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
(c) Copyright 2024 DecisionPoint.com
Watch the latest episode of DecisionPoint Trading Room with Carl & Erin Swenlin Mondays on the DecisionPoint YouTube channel here!
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