I had a good amount of Reader Requests and I would say that the majority could be considered "Diamonds in the Rough". I picked out three, one from a different reader so I have three readers represented in today's picks. I couldn't cover them all so some of you may've missed out this week. Be sure to resend next week if those symbols are still on your mind or if you really need some information on what you requested and I didn't cover it, feel free to send me an email and I can give you a quick read.
Tomorrow is the Diamond Mine trading room! Don't miss out on all the fun we have! There is a core group of readers that would love to welcome you into the conversation. Or, just be a fly on the wall and get all of the stock ideas!
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": ARCH, FLGT and INFA.
Other requests: RILY, MBLY, SW, OKE, MRO, LNG, LOMA, CTRE, MRX and SBRA.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (10/25/2024):
Topic: DecisionPoint Diamond Mine (10/25/2024) LIVE Trading Room
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Passcode: October#25
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When: November 5, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine LIVE Trading Room
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Below is the latest free DecisionPoint Trading Room recording from 10/28. 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.
Arch Coal, Inc. (ARCH)
EARNINGS: 2024-11-05 (BMO)
Arch Resources, Inc. engages in the production and distribution of thermal coal. It operates through the following segments: Metallurgical, Thermal, and Idle and Other. The Metallurgical segment contains the company's metallurgical operations in West Virginia. The Thermal segment refers to the company's thermal operations in Wyoming and Colorado. The company was founded in 1969 and is headquartered in St. Louis, MO.
Predefined Scans Triggered: P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
ARCH is unchanged in after hours trading. I spotted a bullish cup with handle pattern on the chart. It has now broken out of it and should break out above overhead resistance. The RSI is not overbought despite the recent rally. The PMO has surged above the signal line well above the zero line. Stochastics are now above 80. The Coal group is really outperforming right now. ARCH isn't a great performer, but ultimately it is outperforming the SPY. The stop is set beneath the 50-day EMA at 7.5% or $135.75.
The only real issue on the weekly chart is that the StockCharts Technical Rank (SCTR) is not yet in the hot zone*. However, it is making its way there. The weekly RSI just entered positive territory. The weekly PMO is on a new Crossover BUY Signal. If it can make its way back to the 2024 high it would be a sizable gain.
*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.
Fulgent Genetics, Inc. (FLGT)
EARNINGS: 2024-11-08 (BMO)
Fulgent Genetics, Inc. is a technology company, which engages in the provision of gene testing and sequencing solutions. It offers genes and panels, known mutation, hereditary cancer, carrier screening, and tumor profiling solutions. The company was founded by Ming Hsieh on May 13, 2016 and is headquartered in El Monte, CA.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, Moved Above Upper Price Channel and New CCI Buy Signals.
FLGT is up +4.99% in after hours trading. Apparently they have just been awarded a contract by the Veteran's Administration and it is off to the races now. I would expect to see some good follow through based on the indicators as well. The RSI is not overbought despite the strong rally. The PMO is rising on a Crossover BUY Signal. Volume is certainly coming in based on the rise in the OBV. Stochastics are almost above 80. The group is still suffering, but I do see that it did start to see a rising relative strength line. FLGT is killing it against the group and is therefore doing extremely well against the SPY. If the group gets going this will continue to help FLGT. The stop is set arbitrarily at 7.2% or $19.90.
Price is coming off support, but is still holding beneath the 43-week EMA. It remains in a declining trend which isn't good for the intermediate term. However, the VA story could pull it out of this declining trend. The weekly RSI still needs some help as it is below net neutral (50). The weekly PMO has whipsawed back into a Crossover BUY Signal so momentum is going its way. If it can reach the late 2023 high we would see nice profits.
Informatica Inc. (INFA)
EARNINGS: 2025-02-12 (AMC)
Informatica, Inc. engages in the development of an intelligent data management cloud platform. Its software connects, manages, and unifies data across any multi-cloud hybrid system. The company was founded in 1993 and is headquartered in Redwood City, CA.
Predefined Scans Triggered: Elder Bar Turned Green, New CCI Buy Signals, Moved Above Upper Price Channel, Parabolic SAR Buy Signals and P&F Low Pole.
INFA is unchanged in after hours trading. They reported earnings yesterday and they were well received today. We have a nice breakout from a congestion zone. Price did move above resistance intraday, but did fall back below. It should break out based on indicators. The RSI is not overbought and the PMO has surged above the signal line (hard to see so you'll have to trust me on this). Unfortunately, Stochastics don't look very encouraging yet, but they are trying to turn back up in positive territory. The Software group took a hit today and it caused relative strength to be lost. We'll want to be careful with this group. It sure was looking good before today. INFA is showing some outperformance on its own. Tech was hit hard today so seeing this rally is very good. The stop is set beneath support at 7% or $25.38.
We see a rising trend within the current trading range so it has been slowly trying to improve. There is a nice rounded bottom formation. The weekly RSI is positive and not overbought. The weekly PMO is on a Crossover BUY Signal and is above the zero line now. The SCTR is not yet in the hot zone, but it is headed there quickly now. If price can get halfway through the resistance zone we would see a nice 20%+ appointment.
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 65% 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