I wasn't completely surprised to see a lot of Financial stocks requested given the recent rate cut that should benefit this sector of the market. The two I am presenting today are poised to move even higher.
The third stock today is from the Technology sector. Given the turnaround in the market, this area should see some action. I'll be watching Semiconductors closely right now, but this stock is in Electronic Equipment.
Thank you to all who sent in symbols. You make Thursday easier for Reader Request Day. It is always nice to see a lot of symbols in my inbox. Enjoy the rally!
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": BMI, FITB and SYF.
Other requests: ROAD, ECO, OUT, BN.TO, VOD, KYN, SNDR and RVTY.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (9/13/2024):
Topic: DecisionPoint Diamond Mine (9/13/2024) LIVE Trading Room
Recording & Download LINK
Passcode: September#13
REGISTRATION for 9/20/2024:
When: September 20, 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 9/16. 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.
Badger Meter, Inc. (BMI)
EARNINGS: 2024-10-17 (BMO)
Badger Meter, Inc. engages in the provision of flow measurement, control products, and communications solutions that serve water utilities, municipalities, and commercial and industrial customers worldwide. Its products are classified as Municipal Water and Flow Instrumentation. The company was founded in 1905 and is headquartered in Milwaukee, WI.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, Moved Above Upper Price Channel, P&F Double Top Breakout, P&F Bullish Triangle, Moved Above Upper Keltner Channel and New 52-week Highs.
BMI is up +0.04% in after hours trading. We have a nice breakout from a prior trading range. The rally has been forceful already so the RSI is now overbought slightly, but as I've pointed out, it can hold these conditions for some time while it is in a strong rally. However, I wouldn't be surprised if we did see a bit of pullback toward the breakout point first. The PMO is rising on a Crossover BUY Signal that hit above the zero line. Stochastics are turning back up above 80 and relative strength lines are all rising strongly. I've set the stop below the 20-day EMA at 7.5% or $203.07.
We can see a strong breakout as price made its way to new all-time highs. The weekly RSI is positive and not yet overbought. The weekly PMO is rising on a Crossover BUY Signal well above the zero line. The StockCharts Technical Rank (SCTR) is in the hot zone* above 70. Consider a 17% upside target to about $256.86.
*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.
Fifth Third Bancorp (FITB)
EARNINGS: 2024-10-18 (BMO)
Fifth Third Bancorp is a bank holding company, which engages in the provision of diversified financial services. It operates through the following segments: Commercial Banking, Consumer and Small Business Banking, Wealth and Asset Management, and General Corporate and Other. The Commercial Banking segment offers credit intermediation, cash management, and financial services to large and middle-market businesses and government and professional customers. The Consumer and Small Business Banking segment provides a full range of deposit and loan products to individuals and small businesses through a network of full-service banking centers and relationships with indirect and correspondent loan originators in addition to providing products designed to meet the specific needs of small businesses, including cash management services. The Wealth and Asset Management segment is involved in wealth management solutions for individuals, companies, and not-for-profit organizations including wealth planning, investment management, banking, insurance, trust, and estate services. The General Corporate and Other segment focuses on the unallocated portion of the investment securities portfolio, securities gains and losses, certain non-core deposit funding, unassigned equity, unallocated provision for credit losses or a benefit from the reduction of the allowance for credit losses, the payment of preferred stock dividends, and certain support activities. The company was founded on October 7, 1974 and is headquartered in Cincinnati, OH.
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.
FITB is unchanged in after hours trading. I liked the breakout from the bullish ascending triangle pattern. It does imply we will see more upside. This one is also getting overbought on the RSI, but like BMI, it can hold overbought conditions for some time based on the last strong rally. There is a new PMO Crossover BUY Signal and the OBV is rising strongly as volume is coming in on the rally. Stochastics are rising above 80. Relative strength is improving for the group. FITB is a leader within the group and it is also outperforming the SPY right now. The stop is set in such a way that it would require a drop beneath the rising bottoms trendline at 7.8% or $40.23.
Price is arriving at overhead resistance and it could have trouble there. The weekly chart itself does look bullish with a strong rising trend, a positive weekly RSI that isn't overbought and a weekly PMO that is on a Crossover BUY Signal well above the zero line. The SCTR is also sitting in the hot zone above 70. Consider a 17% upside target to about $51.06.
Synchrony Financial (SYF)
EARNINGS: 2024-10-29 (BMO)
Synchrony Financial engages in the provision of consumer financial services. It focuses on digital, health and wellness, retail, telecommunications, home, auto, outdoor, pet, and other industries. The company was founded on September 12, 2003 and is headquartered in Stamford, CT.
Predefined Scans Triggered: Moved Above Upper Price Channel, New CCI Buy Signals and P&F Double Top Breakout.
SYF is down -0.01% in after hours trading. We have a large double bottom pattern that was confirmed with today's breakout above the confirmation line (middle of the "W"). The RSI is positive and not overbought despite the strong rally higher. The PMO is on a Crossover BUY Signal that occurred above the zero line. Stochastics have just pushed above 80. Relative strength for the group is waning a bit, but SYF is outperforming the SPY and the group. I've set the stop beneath the 50-day EMA at $47.25.
This is the third try at a breakout. The weekly PMO is flat above the zero line which is bullish, but it is also on a Crossover SELL Signal so that isn't a good sign. The weekly RSI does look good as it is positive and not overbought. The SCTR is in the hot zone. Other than the weekly PMO declining slightly, this looks pretty good. Consider a 17% upside target to about $59.71.
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
(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