It is Reader Request Day and while I only had a handful of stocks requested, they were all "Diamond in the Rough" material so I didn't add any of my own today. Should I run into light Reader Request Days as we have, I am likely to add some of my own selections as I have done previously. Today I didn't need to.
Thank you to those that submit requests. I really enjoy analyzing them all and seeing what is on your radar. Don't be shy! Submit any that have been on your mind for whatever reason! It's way more fun!
Tomorrow is the Diamond Mine trading room so be sure and register now! Recordings are always available if you can't make it. We have an excellent time in the room with the chat room staying very busy. I start with a general market overview, move to a Sector to Watch and an Industry Group to Watch, then we look at this week's "Diamonds in the Rough", do symbol requests and finish by running some scans. Join us!
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": CRDO, CHWY and VRT.
Other requests: MSCI, TGTX, CRK and REGN.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (8/9/2024):
Topic: DecisionPoint Diamond Mine (8/9/2024) LIVE Trading Room
Recording & Download Link
Passcode: August#9
REGISTRATION for 8/16/2024:
When: August 16, 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 8/12. 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.
Chewy Inc. (CHWY)
EARNINGS: 2024-08-28 (BMO)
Chewy, Inc. operates as an online retailer of pet food and other pet-related products and services. It supplies pet medications, food, treats and other pet-health products and services for dogs, cats, fish, birds, small pets, horses, and reptiles. It has a portfolio of pet healthcare offerings that includes Chewy Pharmacy, Connect with a Vet, and CarePlus, an exclusive suite of pet-first insurance and wellness plans. The company was founded by Ryan Cohen and Michael Day in September 2011 and is headquartered in Plantation, FL.
Predefined Scans Triggered: P&F Low Pole and New CCI Buy Signals.
CHWY is down -0.68% in after hours trading. What caught my eye was the breakout from the bullish double bottom pattern, but then I saw a positive OBV divergence which added to my interest. Even with this nice rally out of the August low, price is not overbought based on the RSI. The PMO is nearing a Crossover BUY Signal. Stochastics are rising above 80 and relative strength is rising across the board. The stop is set a little deep on the 20-day EMA at 7.9% or $24.38.
The weekly chart also is looking good. Price is coming up against overhead resistance, but we have great indicators that suggest it will breakout. The weekly RSI is not overbought and the weekly PMO has surged or bottomed above the signal line. The StockCharts Technical Rank (SCTR) is at the very top of the hot zone*. If price can recapture this year's high it would be an over 59% gain. We'll see what it can do.
*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.
Credo Technology Group Holding Ltd. (CRDO)
EARNINGS: 2024-09-04 (AMC)
Credo Technology Group Holding Ltd. engages in the development of connectivity solutions and products for the data infrastructure market. Its products include integrated circuits, active electrical cables, and SerDes chiplets. The company was founded by Chi Fung Cheng and Yat Tung Lam in September 2014 and is headquartered in George Town, Cayman Islands.
Predefined Scans Triggered: Moved Above Ichimoku Cloud and New CCI Buy Signals.
CRDO is down -0.30% in after hours trading. Today saw a very strong rally that took price above overhead resistance. I like the "V" bottom. Once price retraces back up 1/3rd of the pattern, the expectation is a breakout above the left side of the "V". It is a Technology stock and that seems to be where the strength lies on this new rally. The RSI is not overbought and the PMO is nearing a Crossover BUY Signal. Volume is coming in and Stochastics are above 80. Relative strength is good for the group and for CRDO. It is currently showing leadership among the group. The stop is set at the 20-day EMA at 7.8% or $27.97.
Here we have another weekly PMO Surge above the signal line on this strong rally. The weekly RSI is positive and not overbought and the SCTR is in the hot zone. It is about 12% away from the next area of overhead resistance, but I'm looking for it to break out there so consider a 17% upside target to about $35.50.
Vertiv Holdings, LLC (VRT)
EARNINGS: 2024-10-23 (BMO)
Vertiv Holdings Co. engages in the design, manufacture, and service of critical digital infrastructure technology that powers, cools, deploys, secures and maintains electronics that process, store and transmit data. It also offers power management products, thermal management products, integrated rack systems, modular solutions, and management systems for monitoring and controlling digital infrastructure. It operates through the following segments: Americas, Asia Pacific, and Europe, Middle East and Africa (EMEA). The Americas segment offers critical infrastructure and solutions, integrated rack solutions, and services and spares. The Asia Pacific segment includes products and services sold for applications within the data center, communication networks, and commercial or industrial markets throughout China, India, and the rest of Asia. The EMEA segment sells products and services for applications within the data center, communication networks and commercial/industrial markets. The company was founded on February 7, 2020 and is headquartered in Columbus, OH.
Predefined Scans Triggered: P&F Double Top Breakout.
VRT is down -0.04% in after hours trading. Today saw a nice breakout above the 50-day EMA. It is still technically in a declining trend out of the May top, but it should see a breakout soon. The RSI is not overbought and there is a new PMO Crossover BUY Signal. Volume is starting to come in on the rally looking at the OBV. Stochastics are rising above 80 and I like that relative strength lines are all on the rise. The stop is set at the 20-day EMA at 7.7% or $76.57.
This looks like a gigantic bull flag formation that would imply lots of upside ahead should we get the breakout above the declining trend. The weekly RSI has just entered positive territory and the SCTR is in the hot zone. The weekly PMO was greatly damaged by the decline out of the all-time high, but it is beginning to show signs of deceleration. Upside potential is healthy should it recapture its all-time high.
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 40% long, 0% short. I own VRT.
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