I didn't get many requests. In fact, I only found one request email (forgive me if I missed yours!) and it was quite an interesting. He wrote down all of the stocks mentioned on CNBC's Fast Money show and passed them along. This was a fun exercise. I often wonder when watching these types of shows, "What does the chart look like?"
Well I got to find out what all of the charts looked like. Some were overbought, but interestingly most had rising PMOs and looked quite bullish. I opted to go with names I was familiar with and that fit our Technology theme from last Friday. I will say that most of these stocks had a great day, up quite a bit. Like I said, interesting exercise.
If you would like the complete Fast Money list, email me and I'll forward it. I've instead opted to only list my runner-ups rather than the lengthy list forwarded.
Don't forget to sign up for tomorrow's Diamond Mine trading room! I'm curious what the scans will bring to light and to see how Diamonds in the Rough have faired.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": AMD, DELL and WDC.
Runner-ups: GCT, UPST, HL and DKNG.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (9/20/2024):
Topic: DecisionPoint Diamond Mine (9/20/2024) LIVE Trading Room
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Below is the latest free DecisionPoint Trading Room recording from 9/23. 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.
Advanced Micro Devices, Inc. (AMD)
EARNINGS: 2024-10-29 (AMC)
Advanced Micro Devices, Inc. engages in the provision of semiconductor businesses. It operates through the following segments: Data Center, Client, Gaming, and Embedded. The Data Center segment includes server-class CPUs, GPUs, AI accelerators, DPUs, FPGAs, SmartNICs, and Adaptive SoC products. The Client segment refers to the computing platforms, which are a collection of technologies that are designed to work together to provide a more complete computing solution. The Gaming segment is a fundamental component across many products and can be found in APU, GPU, SoC or a combination of a discrete GPU with another product working in tandem. The Embedded segment focuses on the embedded CPUs, GPUs, APUs, FPGAs, and Adaptive SoC products. The company was founded by W. J. Sanders III on May 1, 1969 and is headquartered in Santa Clara, CA.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, P&F Ascending Triple Top Breakout, P&F Double Top Breakout and Moved Above Upper Keltner Channel.
AMD is down -0.09% in after hours trading. Semiconductors are waking up again and it is likely time to find leaders in the space. AMD has formed a bullish double bottom pattern and with today's breakout, the pattern has been confirmed. The minimum upside target of the pattern is a little below $200. The EMAs are now configured positively with a new Silver Cross and Golden Cross. The RSI is getting overbought, but so far it is below 70. The PMO is now rising in positive territory so new strength is definitely visible. Stochastics also flash strength as they rise above 80. As you can see relative strength for the Semiconductors group has really improved. AMD is showing a gently rising relative strength line to the group so while it is a wild leader, it is showing some leadership nonetheless. The stop is set as close to the EMAs as possible at 7.8% or $154.42.
This was an important breakout this week as it moved price above the 2021 high. I do note that price is still in a declining trend so it does have some work to do. The weekly RSI is now positive and the weekly PMO has turned back up on this rally. The StockCharts Technical Rank (SCTR) is not in the hot zone* but it is moving toward it very quickly. I think it does have potential to recapture all-time highs.
*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.
Dell Technologies, Inc. (DELL)
EARNINGS: 2024-11-26 (AMC)
Dell Technologies, Inc. is a holding company, which engages in the provision of information technology hardware, software, and service solutions through its subsidiaries. It operates through the following segments: Infrastructure Solutions Group (ISG), Client Solutions Group (CSG), and VMware. The ISG segment includes servers, networking, and storage, as well as services and third-party software and peripherals that are closely tied to the sale of ISG hardware. The CSG segment consists of sales to commercial and consumer customers of desktops, thin client products, and notebooks. The VMware segment provides compute, cloud management, networking and security, storage and availability, and other end-user computing offerings. The company was founded by Michael Saul Dell in 1984 and is headquartered in Round Rock, TX.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, Moved Above Ichimoku Cloud, P&F Double Top Breakout and Moved Above Upper Keltner Channel.
DELL is down -1.38% in after hours trading so it may be ready to take back some of today's big gains. I liked today's breakout from a mini flag formation. We also have a nearing Silver Cross which would give us an IT Trend Model BUY Signal. There is the small problem of an overbought RSI, but a small decline as we see in after hours trading could alleviate this quickly. We've also seen it get far more overbought previously. The PMO is now in positive territory and is rising so we have new strength. Stochastics are holding above 80. The group is doing alright against the SPY. DELL is outperforming both the group and the SPY overall. The stop is set as close to the 20-day EMA as possible at 7.7% or $116.75.
We do still have a longer-term declining trend to contend with but it looks ready to breakout of it soon. The weekly RSI is now positive and the weekly PMO is beginning to turn back up. The SCTR has just entered the hot zone. It may take some time, but I do see a move to new all-time highs as possible.
Western Digital Corp. (WDC)
EARNINGS: 2024-10-30 (AMC)
Western Digital Corp. engages in the development, manufacture, marketing, and sale of data storage devices and solutions. It operates through the Flash and Hard Disk Drive segments. The Flash segment represents flash-based data storage devices. The Hard Disk Drive segment provides hard disk storage solutions. The company was founded by Alvin B. Phillips in 1970 and is headquartered in San Jose, CA.
Predefined Scans Triggered: Elder Bar Turned Green, Breakaway Gap Ups, New CCI Buy Signals, Gap Ups, Moved Above Upper Keltner Channel, Moved Above Upper Bollinger Band, Stocks in a New Uptrend (Aroon), Moved Above Ichimoku Cloud, Moved Above Upper Price Channel, Runaway Gap Ups, P&F Double Top Breakout and P&F Triple Top Breakout.
WDC is unchanged in after hours trading. This is the most predefined scans triggered that I can remember. Not sure if that means good things, but it is interesting. Today saw a breakaway gap. It is vulnerable to a reverse island situation, but more likely we will see follow through as we normally will on breakaway gaps. The RSI is not overbought yet despite today's big move higher. The PMO is rising and has just moved into positive territory so this is new strength. Stochastics are above 80 and relative strength is improving along the way. The stop is set beneath support at 7.4% or $65.24.
Price reversed at support and managed to get above the following line of resistance. This week looks great as price has remained above new support and is jumping higher. The weekly RSI is above net neutral (50) and the weekly PMO has turned up. The SCTR is not yet in the hot zone, but it is headed in the right direction. I'm looking for a breakout.
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 60% 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)
For more links, go to DecisionPoint.com