I'm finding it interesting that for some time I haven't detected any themes in the scan results. Today results were all over the place. Not surprisingly, I did see a few Energy names make their way into the results given today's big rally in Crude Oil and the Energy sector, but I wouldn't say it was a "theme" as there were only a few. I don't trust Crude to keep rising right now so I opted not to include any Energy names.
I did notice that a few today were sitting in underperforming industry groups. That is something to keep in mind as we often say that 50% of your stock's movement is determinant on what the sector and group are doing. The charts were bullish enough to include anyway. Selections were slim today.
The market is acting mushy right now. I had been enamored of the Technology area, but it isn't taking off as I originally anticipated. The market looks like it wants to top so be sure you are using stops.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": BDN, HAIN, HWKN and KNSL.
Runner-ups: CVCO, EZPW and PATK.
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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.
Brandywine Realty Trust (BDN)
EARNINGS: 2024-10-22 (AMC)
Brandywine Realty Trust engages in the acquisition, development, redevelopment, ownership, management, and operation of a portfolio of office, life science and lab, residential and mixed-use properties. It operates through the following segments: Philadelphia Central Business District (Philadelphia CBD), Pennsylvania Suburbs, Austin, Texas, and Other. The Philadelphia CBD segment includes properties in Philadelphia, Pennsylvania. The Pennsylvania Suburbs segment refers to the properties in Chester, Delaware, and Montgomery counties. The Austin, Texas segment focuses on properties in the City of Austin, Texas. The Other segment relates to properties located in Washington, D.C., Northern Virginia, Southern Maryland, Camden County, New Jersey and New Castle County, Delaware. The company was founded by Gerard H. Sweeney in 1986 and is headquartered in Philadelphia, PA.
Predefined Scans Triggered: New CCI Buy Signals, New 52-week Highs, Moved Above Upper Bollinger Band, Stocks in a New Uptrend (Aroon), Moved Above Upper Price Channel, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
BDN is down -0.18% in after hours trading. We have a strong breakout today to new 52-week highs. The RSI is not yet overbought so it can accommodate more upside. The PMO is on a Crossover BUY Signal above the zero line. It is also flat above the zero line which signifies pure strength. Volume is coming in. Stochastics are above 80. Relative strength for the group is not good, but we are seeing some outperformance by BDN against the SPY and the group so it is acceptable. The stop is set beneath the last low and below the 20-day EMA at 7.1% or $5.21. It is low priced so position size wisely.
I like the large cup shaped bottom on price. I note that price has this week broken above very strong overhead resistance. The weekly RSI is positive and the weekly PMO is rising strongly above the zero line. The StockCharts Technical Rank (SCTR) is well within the hot zone* above 70. There isn't really any overhead resistance now that it has had the breakout. I don't know that it will get up past 60%. That is where the next resistance level lies.
*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.
Hain Celestial Group, Inc. (HAIN)
EARNINGS: 2024-11-07 (BMO)
The Hain Celestial Group, Inc. engages in the production and distribution of organic and natural products. It operates through North America and International geographical segments. The North America segment consists of the United States and Canada. The International segment includes the United Kingdom, Ella's Kitchen UK, and Europe. The company was founded by Irwin David Simon on May 19, 1993 and is headquartered in Hoboken, NJ.
Predefined Scans Triggered: Moved Above Upper Keltner Channel, Moved Above Upper Bollinger Bnad and P&F Double Top Breakout.
HAIN is up +1.12% in after hours trading. I like the breakout above the 200-day EMA. Notice this time around it has held above that level whereas the last two breakouts were unsuccessful. This is a little bull flag like. The RSI tells us price isn't overbought yet. The PMO is on a new Crossover BUY Signal that occurred well above the zero line. There is strength here. Stochastics are now above 80. This is another where we do have the group losing relative strength. Although that could turn around quickly if we see investors move more defensive this week. HAIN is just beginning to outperform on its own. The stop is set as close to support as I could get it at 8% or $8.23. This is low priced so position size wisely.
The weekly chart looks pretty decent considering price is so close to all-time lows. The weekly RSI is positive and not overbought. The weekly PMO is rising on a Crossover BUY Signal and is getting very close to vaulting the zero line. The SCTR is in the hot zone. I don't know that it'll reach the upside potential level as there is some resistance visible from earlier in 2024.
Hawkins Chemical, Inc. (HWKN)
EARNINGS: 2024-10-30 (AMC)
Hawkins, Inc. engages in the distribution, blending, and manufacture of chemicals and specialty ingredients for a wide variety of industries. It operates through the following segments: Industrial, Water Treatment, and Health and Nutrition. The Industrial segment provides industrial chemicals, products, and services to the agriculture, chemical processing, electronics, energy, food, pharmaceutical, and plating industries. The Water Treatment segment offers chemicals, equipment, and solutions for potable water, municipal, industrial wastewater, industrial process water, and non-residential swimming pool water. The Health and Nutrition segment consists of ingredient distribution, processing, and formulation solutions to manufacturers of nutraceutical, functional food and beverage, personal care, dietary supplement and other nutritional food, health, and wellness products. The company was founded by Howard Hawkins in 1938 and is headquartered in Roseville, MN.
Predefined Scans Triggered: New 52-week Highs and P&F Double Top Breakout.
HWKN is unchanged in after hours trading. I would like to have seen a breakout today, but it is poised well. The RSI is positive and not overbought. The PMO is nearing a Crossover BUY Signal. Stochastics are holding above 80. Relative strength is improving for both the industry group and HWKN. We should see a breakout. The stop is set at the 50-day EMA below the prior low at 7.9% or $116.73.
One issue is the parabolic formation. It isn't vertical yet so it could keep moving higher. It is overbought based on the weekly RSI, but it has been much further overbought before. The weekly PMO has surged (bottomed) above the signal line well above the zero line. The SCTR is at the top of the hot zone so we should see more upside.
Kinsale Capital Group Inc. (KNSL)
EARNINGS: 2024-10-24 (AMC)
Kinsale Capital Group, Inc. is a property and casualty insurance company, which focuses exclusively on the excess and surplus lines market in the U.S., where it can use its underwriting expertise to write coverages for hard-to-place, small business risks, and personal lines risks. The company was founded by Michael P. Kehoe on June 3, 2009 and is headquartered in Richmond, VA.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, New CCI Buy Signals, P&F Double Top Breakout, P&F Triple Top Breakout and P&F Bear Trap.
KNSL is down -0.30% in after hours trading. I like this reversal coming off support. This looks like a weird reverse head and shoulders with the mid April lows as the left shoulder and the long trading range as the head with the recent low as the right shoulder. This does look like it wants to bottom. The RSI is not overbought and is in positive territory. The PMO is bottoming above the zero line. Stochastics are above 80. The group is not performing well right now, but we do see some outperformance coming in for KNSL against the SPY and the group. The stop is set beneath support at 7.7% or $439.57.
The weekly chart shows a nice rising trend out of the 2021 lows. The weekly RSI is positive and not overbought. The weekly PMO has surged above the signal line. The SCTR is not in the hot zone right now but is rising quickly. Consider a 17% upside target to about $557.21.
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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)
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Here is the current chart:
Full Disclosure: I am 60% long, 0% short.
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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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