We three readers supply requests today. I did get the list of the Fast Money (CNBC) stock symbols, but it was too long and I had plenty of other requests to review.
One reader requested Costco (COST) but I won't be presenting it. The PMO had just turned up, but it has turned down again. I like it for a hold, but I don't see it as a Buy right now. Hence it wasn't included today.
I do have three symbols that look good for investment now, but I must say the market is acting a bit toppy again and I'm concerned that yesterday was a bull trap. Be sure and use stops right now or monitor your trades very closely.
Two of today's selections could be considered "Boom or Bust" stocks which have plenty of upside potential. Downside risk doesn't seem too high so I thought both were worth a look (SOFI and UIS). Both are low-priced so position size wisely. Service Now (NOW) is the third choice and should continue higher if the market can continue higher. It is in the Technology space and that will lead the market higher if it has more rally in it.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": NOW, SOFI and UIS.
Other requests: COST, HACK, BUG, LC, MANH, IOT, DUHP and CNK.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (10/4/2024):
Topic: DecisionPoint Diamond Mine (10/4/2024) LIVE Trading Room
Recording & Download Link
Passcode: October#4
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When: October 11, 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 10/7. 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.
ServiceNow, Inc. (NOW)
EARNINGS: 2024-10-23 (AMC)
ServiceNow, Inc. engages in the provision of end-to-end workflow automation platform for digital businesses. Its Now Platform cloud-based solution is embedded with artificial intelligence (AI) and machine learning (ML). The company was founded by Frederic B. Luddy in June 2004 and is headquartered in Santa Clara, CA.
Predefined Scans Triggered: Stocks in a New Uptrend (Aroon), New 52-week Highs and P&F Double Top Breakout.
NOW is down -0.06% in after hours trading. It may not look like it, but we do have a breakout here to new 52-week Highs. This should be a winner that will keep on winning. The RSI is not overbought despite the rally. I really like the new PMO Crossover BUY Signal so far above the zero line. Stochastics are now above 80 and are still rising. Relative strength does seem to be picking up against the SPY for the Software group. NOW has already been outperforming both the group and the SPY. The stop is set around the area of the 50-day EMA at 7.5% or $873.78. It would've been too deep if set at support. I don't like stops greater than 8%.
The weekly chart shows a strong rising trend and a breakout from a consolidation zone. The weekly RSI is not overbought so it can accommodate more upside. The weekly PMO is on a Crossover BUY Signal well above the zero line. The StockCharts Technical Rank (SCTR) is within the hot zone* above 70. Consider a 17% upside target to about $1105.22.
*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.
SoFi Technologies, Inc. (SOFI)
EARNINGS: 2024-10-29 (BMO)
SoFi Technologies, Inc. is a financial service platform, which engages in the provision of student loan refinancing options to the private student loan market. It offers home loans, personal loans, and credit cards. It operates through the following segments: Lending, Technology Platform, and Financial Services. The Lending segment includes personal loan, student loan, home loan products, and related servicing activities. The Technology Platform segment focuses on technology products and solutions revenue. The Financial Services segment includes the SoFi Money product, SoFi Invest product, SoFi Credit Card product, SoFi Relay personal finance management product, and other financial services such as lead generation and content for other financial services institutions. The company was founded in 2011 and is headquartered in San Francisco, CA.
Predefined Scans Triggered: Stocks in a New Uptrend (ADX) and P&F Double Top Breakout.
SOFI is unchanged in after hours trading. I didn't annotate it, but we have a rounded bottom taking up the whole chart. We have a nice breakout above resistance. The RSI is not overbought yet and the PMO is rising on a Crossover BUY Signal well above the signal line. We also have rising bottoms on the PMO. Stochastics are above 80. Relative strength is slowly picking up for the Consumer Finance group. SOFI is definitely showing leadership within the group and consequently it is outperforming the SPY by a mile. We don't have to set too deep a stop. I've set it around the 20-day EMA at 7% or $8.02.
It is in a long-term trading range which isn't that spectacular, but price is making its way to the top of the range and that would be a nice gain. Not so sure we'll get a breakout there, but the weekly RSI isn't overbought and the weekly PMO is rising on a Crossover BUY Signal, so who knows? The SCTR is also in the hot zone implying more upside to come.
Unisys Corp. (UIS)
EARNINGS: 2024-11-06 (AMC)
Unisys Corp. is an information technology solutions company that delivers successful outcomes for the most demanding businesses and governments. The firm offers digital workplace solutions, cloud and infrastructure solutions, enterprise computing solutions and business process solutions. It operates through the following business segments: Digital Workplace Solutions (DWS), Cloud & Infrastructure Solutions (C&I), and Enterprise Computing Solutions (ECS). The Digital Workplace Solutions segment provides solutions that transform digital workplaces securely and create exceptional end-user experiences. The Cloud & Infrastructure segment provides solutions that drive modern IT service platforms, cloud applications development, intelligent services, and cybersecurity services. The Enterprise Computing Solutions segment provides solutions that harness secure, continuous high-intensity computing and enable digital services through software-defined operating environments. The company was founded in 1986 and is headquartered in Blue Bell, PA.
Predefined Scans Triggered: Bearish Harami, Stocks in a New Uptrend (ADX) and P&F Double Top Breakout.
UIS is unchanged in after hours trading. I liked that we had a strong breakout followed by a mechanical pullback. Unfortunately this did form a bearish Harami candlestick which implies possibly another decline. The pullback got the RSI out of overbought territory. The PMO is on a new Crossover BUY Signal well above the zero line. The PMO is also rather flat above the zero line so I detect pure strength. The pullback also caused Stochastics to drop slightly so again we could need another decline before this one gets going again. The stop is set beneath the September tops at 7.8% or $5.77.
We have another trading range stock but right now price is headed to test the top of the range. Given the positive weekly RSI and weekly PMO Crossover BUY Signal above the zero line, we should see price get close to that juicy upside target. The SCTR is confirming the bullishness as it is sitting in the hot zone.
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 55% 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