It was an interesting Reader Request Day. I didn't have too many requests, but the ones that came in were constructive.
One of the readers sent in a handful of Biotechs that were starting to turn back up. They have been fully beaten down, but these new rallies may not have the needed thrust yet. The PMOs were still moving lower. It is certainly an area to keep on the radar, but Healthcare is still struggling. It is due for a reversal, but so far I'm not seeing enough participation. It will be interesting to see how it looks in the Diamond Mine tomorrow morning.
Another reader sent in XLU the Utilities sector ETF. I included a Utilities related ETF yesterday. I love this sector right now and could've picked XLU, but it was already on our radar. Good catch on this area of strength.
Be sure and sign up for tomorrow's Diamond Mine trading room using the links below the Diamonds logo below.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": HD, METC and VCTR.
Other requests: HSY, CRM, XLU, PG, LLY, ABBV, AZN, AMGN, MRK and PFE.
SCHEDULE FOR NEXT WEEK: There will be no Diamond Mine next week due to Thanksgiving. Additionally, I will not be doing Reader Requests as they would fall on Thursday. Instead I will do seven "Diamonds in the Rough" on Tuesday and three ETF picks on Wednesday. The DP Diamonds Recap will be published on Friday.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (11/15/2024):
Topic: DecisionPoint Diamond Mine (11/15/2024) LIVE Trading Room
Recording & Download Link
Passcode: November#15
REGISTRATION for 11/22/2024:
When: November 22, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine LIVE Trading Room
Register in advance for this webinar HERE
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Below is the latest free DecisionPoint Trading Room recording from 11/18. 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.
Home Depot, Inc. (HD)
EARNINGS: 2025-02-25 (BMO)
The Home Depot, Inc. engages in the sale of building materials and home improvement products. Its products include building materials, home improvement products, lawn and garden products and decor products. The firm operates through the following geographical segments: U.S., Canada and Mexico. It offers home improvement installation services, and tool and equipment rental. The company was founded by Bernard Marcus, Arthur M. Blank, Kenneth Gerald Langone and Pat Farrah on June 29, 1978 and is headquartered at Atlanta, GA.
Predefined Scans Triggered: Moved Above Ichimoku Cloud and Elder Bar Turned Green.
HD is unchanged in after hours trading. HD has been in a short-term decline that forms the handle on a cup with handle chart pattern. These are bullish and do imply a breakout above the left lip of the cup. This would imply a breakout to another all-time high. The RSI is positive and not overbought. The PMO has just turned back up. Stochastics aren't above 80, but they are holding at the top of positive territory above net neutral (50). Relative strength is improving for the group. HD is having a little trouble outperforming the group near-term, but overall it tends to outperform the group. It is outperforming the SPY right now. The stop is set below the cup at 7.6% or $379.25. (I own HD.)
I like the breakout from the long-term trading range. It broke out and then had a mechanical pullback toward support and now it is rising again. The weekly RSI is positive and not overbought. The weekly PMO has surged (bottomed) above the signal line. The StockCharts Technical Rank (SCTR) is not quite in the hot zone* but it is close enough. Consider a 17% upside target to $480.23.
*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.
Ramaco Resources, Inc. (METC)
EARNINGS: 2025-03-06 (AMC)
Ramaco Resources, Inc. engages in the operation and development of coal mining properties. The firm deals with metallurgical coal in central and southern West Virginia, southwestern Virginia and southwestern Pennsylvania. Its portfolio consists of Elk Creek, Berwind, RAM Mine, and Knox Creek. The company was founded by Randall W. Atkins in August 2015 and is headquartered in Lexington, KY.
Predefined Scans Triggered: Elder Bar Turned Green, Moved Above Upper Price Channel, New CCI Buy Signals and P&F Double Top Breakout.
METC is unchanged in after hours trading. I really liked this chart. We have a large bullish double bottom pattern. Price has confirmed it on the breakout. The target of the pattern would take price to the next level of overhead resistance. Today's rally was a nice thrust upward. The RSI is positive and not yet overbought. The PMO is accelerating higher well above the zero line. Stochastics have camped out above 80 and relative strength studies show rising trends across the board. I set the stop as close to support as I could. It would be over 8% if I went below it and that is too deep for me. I set it at 7.8% or $12.12.
The double bottom looks very nice on the weekly chart. We can see the declining trend has been broken as well. The weekly RSI just entered positive territory and the weekly PMO is nearing a Crossover BUY Signal. The SCTR is nearly in the hot zone and rising quickly. If it can reach the upside target of the pattern, it would be an over 18% gain. It could also breakout there as it is a "minimum" upside target for the pattern.
Victory Capital Holdings, Inc. (VCTR)
EARNINGS: 2025-02-13 (AMC)
Victory Capital Holdings, Inc. engages in the provision of specialized investment strategies to institutions, intermediaries, retirement platforms, and individual investors. It offers a range of investment products, including actively and passively managed mutual funds, rules-based and active exchange traded funds (ETFs), institutional separate accounts, variable insurance products, alternative investments, and private closed end funds. Its strategies are also offered through third-party investment products, including mutual funds, third-party ETF model strategies, retail separately managed accounts and unified managed accounts through wrap account programs, collective investment trusts, and undertakings for the collective investment in transferable securities. The company was founded on February 13, 2013 and is headquartered in San Antonio, TX.
Predefined Scans Triggered: New CCI Buy Signals.
VCTR is up +0.96% in after hours trading. We have a strong breakout and then a mechanical pullback to the breakout point. It has rallied off that new support level and looks to move higher on this rising trend. The RSI is positive and not overbought. The PMO has previously surged above the signal line. Stochastics are rising strongly toward 80. Relative strength is definitely good for the group. VCTR has been a clear outperformer of the group and the SPY. I like its chances for more follow through and a breakout. The stop is set below the 20-day EMA. It would've been too deep to set it under support. I opted to make the stop 7.5% or $63.36.
We saw a breakout from the original trading range and then a follow on breakout from there. It is looking a little bit parabolic, but the rally isn't vertical yet. Still we need to be alert. The weekly RSI is overbought, but the weekly PMO looks very good on a Crossover BUY Signal that occurred well above the zero line. The SCTR is well within the hot zone. Consider a 17% upside target to $80.14.
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 own HD.
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