It was a day that the Scan Alert System didn't turn up much symbols so I was interested in what readers had on their radar. I would say nearly all of today's requests have promise. That's saying something on a bad trading day like today.
The market took back much of yesterday's gains and looks particularly weak right now. I sold quite a few positions and am choosing not to be exposed by much right now. Be sure to set hard stops if you are venturing in as even the most beautiful charts may succumb to the market's bearish winds.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": EBAY, NEM and PRMW.
Other requests: ARIS, ERJ, META, RRX, OC, AXTA and DD.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (7/26/2024):
Topic: DecisionPoint Diamond Mine (7/26/2024) LIVE Trading Room
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Topic: DecisionPoint Diamond Mine LIVE Trading Room
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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.
eBay, Inc. (EBAY)
EARNINGS: 2024-11-11 (AMC)
eBay, Inc. is a commerce company, whose platforms include an online marketplace and its localized counterparts, including off-platform businesses in South Korea, Japan, and Turkey, as well as eBay's suite of mobile apps. Its technologies and services are designed to give buyers choice and a breadth of relevant inventory and to enable sellers worldwide to organize and offer their inventory for sale, virtually anytime and anywhere. The company was founded by Pierre Morad Omidyar in September 1995 and is headquartered in San Jose, CA.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, Moved Above Upper Price Channel, P&F Ascending Triple Top Breakout, P&F Double Top Breakout and New 52-week Highs.
EBAY is up +0.07% in after hours trading. I liked today's bullish breakout and bullish engulfing candlestick that implies we'll see another rally tomorrow. It has been on a steady rising trend. The RSI is not overbought and there is a PMO Crossover BUY Signal above the zero line. The OBV is confirming the rally as it rises and Stochastics are above 80. Relative strength lines are all rising higher. The stop is set near support and at a point that would imply a breakdown of the rising trend at 7.9% or $51.78.
EBAY is about to breakout above strong overhead resistance that would likely establish a new trading range. The weekly RSI is positive and not overbought and the StockCharts Technical Rank (SCTR) is in the hot zone* above 70. The weekly PMO is suspect, but currently it is holding above its signal line and looks like it wants to reverse higher. I don't know that it will reach upside potential, but it certainly could turn into a really nice intermediate-term investment.
*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.
Newmont Corporation (NEM)
EARNINGS: 2024-10-24 (BMO)
Newmont Corp. engages in the exploration and acquisition of gold properties, containing copper, silver, lead, zinc or other metals. It operates through the following geographical segments: North America, South America, and Nevada. The North America segment consists primarily of Carlin, Phoenix, Twin Creeks and Long Canyon in the state of Nevada and Cripple Creek and Victor in the state of Colorado. The South America segment consists of Yanacocha in Peru, Merian in Suriname and Cerro Negro. The company was founded by William Boyce Thompson on May 2, 1921, and is headquartered in Denver, CO.
Predefined Scans Triggered: New 52-week Highs, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
NEM is down -0.42% in after hours trading. I've been nervous about Gold Miners, but the GDX chart is looking pretty good so I thought presenting a Gold Miner would be interesting as I do like Gold right now. This one looks particularly bullish given the breakout to new 52-week highs. The RSI is getting overbought, but still has a little more head room. The PMO whipsawed back into a Crossover BUY Signal well above the zero line. Volume is coming in as the OBV confirms the rally. Stochastics just moved above 80. Relative strength is very good. NEM is clearly a leader within the Gold Miners industry group. I set the stop as close to support as possible at 8% or $45.58.
I really like the breakout on the weekly chart. The weekly RSI is unfortunately overbought now, but I expect that condition will persist as NEM looks good for more rally. The weekly PMO is rising strongly well above the zero line and the SCTR is at the top of the hot zone. I think we could see it rally past the next level of resistance.
Primo Water Corporation (PRMW)
EARNINGS: 2024-08-08 (BMO)
Primo Water Corp. engages in the manufacture, process, and distribution of beverages. It operates through the following segments: North America, Rest of World, and All Other. The North America segment offers bottled water, water filtration, and coffee services to customers in North America. The Rest of World segment provides bottled water, water filtration, and coffee services to customers in Europe and Israel. The All Other segment includes the corporate oversight function and other miscellaneous expenses. The company was founded in 1955 and is headquartered in Tampa, FL.
Predefined Scans Triggered: None.
PRMW is down -0.08% in after hours trading. PRMW formed a strong support level on this reversal. We could look at this as a breakout from a flag formation. The rally has been inching higher and has taken price above the 20/50-day EMAs. That avoided a Dark Cross of the 20/50-day EMAs. The RSI is not overbought and the PMO is rising on a Crossover BUY Signal. Stochastics have turned back up above 80. Relative strength is rising for the group and PRMW. It is also showing leadership among the group. Be aware they do report earnings next week. The stop is set as close to support as possible (I don't like stops past 8%) at 7.9% or $20.43.
Price turned back up on the 17-week EMA and before it had to test support. That implies the rally should be lasting. The one problem is the weekly PMO is nearing a Crossover SELL Signal. That should be reversed soon should the rally continue so I'll forgive it. The weekly RSI is not yet overbought. Based on history, it can hold overbought conditions. The SCTR is well within the hot zone above 70. I like 20% for an upside target.
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 20% 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.
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Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
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