The scans were a little light today which was interesting given the strong rally. I expected to see more PMO Crossover BUY Signals and more results on the Surge Scan. I ended up running a few of my other scans to give me more selections.
One thing that I paid close attention to today is the health of the weekly charts. Since I was stuck on a few selections, I opted to go to the weekly chart for confirmation. The four I selected today all had strong weekly charts. That should set them up to do well in both the short and intermediate terms.
Carl and I still think we are at a market top, but today's rally did put a damper on that conclusion. Still we are below all-time highs and could see more churn ahead. Keep your stops in play.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": AJG, SNEX, TCBI and TTD.
Runner-ups: ATEN, BKNG and AGYS.
Diamond Mine Trading Room:
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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.
Gallagher Arthur J & Co. (AJG)
EARNINGS: 2024-10-24 (AMC)
Arthur J. Gallagher & Co. engages in the provision of insurance brokerage, reinsurance brokerage, consulting, and third-party claims settlement and administration services. It operates through the following business segments: Brokerage, Risk Management, and Corporate. The Brokerage segment consists of retail and wholesale insurance brokerage operations. The Risk Management segment provides contract claim settlement and administration services. The Corporate segment manages clean energy and other investments. The company was founded by Arthur J. Gallagher in 1927 and is headquartered in Rolling Meadows, IL.
Predefined Scans Triggered: Parabolic SAR Buy Signals.
AJG is up +0.02% in after hours trading. This one has been steadily rising since bouncing off support. I see a large bull flag on this one and based on minimum upside targets for these patterns, there is plenty of upside available. The RSI is not overbought and the PMO is making its way toward a Crossover BUY Signal. Stochastics are rising strongly in positive territory. The group has not been performing well, but AJG is outperforming on its own so that is okay. If this one fails, we could point to that relative strength line as the possible culprit, but I like its chances of another extended rally. The stop is set beneath support at 7% or $272.57.
We have a beautiful rising trend on the weekly chart that implies we will see even higher prices. It hasn't broken to new all-time highs, but it is very close. The weekly RSI is positive and not overbought. The weekly PMO is surging above the signal line (bottom above the signal line). The StockCharts Technical Rank (SCTR) is almost in the hot zone* above 70. Consider a 17% upside target to about $342.92.
*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.
INTL FCStone Inc. (SNEX)
EARNINGS: 2024-11-20 (AMC)
StoneX Group, Inc. engages in the provision of brokerage and financial services. It operates through the following segments: Commercial Hedging, Global Payments, Securities, Physical Commodities, and Clearing and Execution Services. The Commercial Hedging segment offers risk management consulting services. The Global Payments segment includes global payment solutions for banks, commercial businesses, charities, non-governmental, and government organizations. The Securities segment consists of corporate finance advisory services and capital market solutions for middle market clients. The Physical Commodities segment consists of physical precious metals trading and the physical agricultural and energy commodity businesses. The Clearing and Execution Services segment refers to exchange-traded futures and options, foreign exchange prime brokerage, correspondent clearing, independent wealth management, and derivative voice brokerage. The company was founded by Diego J. Veitia in October 1987 and is headquartered in New York, NY.
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, Parabolic SAR Buy Signals and P&F Double Top Breakout.
SNEX is unchanged in after hours trading. I liked this chart best, it jumped right out at me on the strong breakout move today. We also have a bullish ascending triangle that portended this breakout. I expect followthrough. The RSI isn't overbought yet and the PMO is rising on a Crossover BUY Signal above the zero line. Stochastics are strong and in this case relative strength lines are all on the rise. If I had one complaint it would be that the OBV did not breakout with price. The stop is set beneath support at 7.4% or $79.27.
Here we have another strongly rising trend out of the 2020 low. Price has now broken out to new all-time highs. The weekly RSI is positive and not overbought. The weekly PMO has surged above the signal line and is rising well above the zero line. The SCTR is in the hot zone. Consider a 17% upside target to about $100.16.
Texas Capital Bancshares, Inc. (TCBI)
EARNINGS: 2024-10-17 (BMO)
Texas Capital Bancshares, Inc. is a holding company, which engages in the provision of financial services and customized solutions to businesses, entrepreneurs, and individual customers. The company was founded by George F. Jones, Jr. and Joseph M. Grant in November 1996 and is headquartered in Dallas, TX.
Predefined Scans Triggered: New CCI Buy Signals and Parabolic SAR Buy Signals.
TCBI is unchanged in after hours trading. I didn't annotate it but this looks like a bull flag. What sold me on this chart was the breakout from the declining trend and the PMO turning up so far above the zero line. There is a lot of internal strength here. The RSI is not overbought and the PMO is nearing a Crossover BUY Signal. Stochastics are rising strongly. Banks had a good day, but ultimately they aren't showing much relative strength right now. TCBI is performing well against the group and the SPY and that is most important. Those relative strength lines look very bullish. The stop is set near the 50-day EMA at 7% or $68.05.
The breakout on the weekly chart is what sold me on presenting this one. It has been stuck in this trading range for some time, but this week it is breaking out. The weekly RSI is positive and not overbought. The weekly PMO is on the rise above the zero line. The SCTR is in the hot zone. There is plenty of upside potential if it can get back to its 2021 high.
Trade Desk Inc. (TTD)
EARNINGS: 2024-11-07 (AMC)
The Trade Desk, Inc. engages in the provision of a self-service and cloud-based ad-buying platform. It operates through the United States and International geographical segments. The firm offers omnichannel advertising, audience targeting, solutions for identity, application programming interface (API), custom, and programmatic, measurement and optimization. The company was founded by Jeffrey Terry Green and David Pickles in November 2009 and is headquartered in Ventura, CA.
Predefined Scans Triggered: Elder Bar Turned Green, Moved Above Upper Price Channel, P&F Double Top Breakout, Moved Above Upper Keltner Channel and New 52-week Highs.
TTD is down -0.03% in after hours trading. The breakout from the trading range got me on this one. It also looks like a bull flag out of the September low. The RSI is getting a bit overbought so we could see some consolidation on top of new support. The PMO is flat above the signal line suggesting pure strength. It is hard to see, but we did see a PMO surge above the signal line. Stochastics are above 80. Unfortunately this is another one with an underperforming industry group, but as with the others above, TTD is outperforming the SPY and the industry group. The stop is set beneath support at 7.9% or $105.48.
We don't have the breakout on the weekly chart yet, but given the nice rising trend out of the 2023 low, I am expecting the breakout to occur soon. The weekly RSI is positive and not quite overbought. The weekly PMO is flat above the signal line implying pure strength. It is also on a Crossover BUY Signal well above the zero line. Consider a 17% upside target to about $134.00.
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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)
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