I was very pleased to see plenty of results come out of my Diamonds Scans. There were almost too many there when I added PMO Crossovers. I am feeling good about today's picks.
The majority of the market are now rallying as small- and mid-cap indexes reach new all-time highs. It is time we can look at reversal candidates. I do have one included today.
All of the sectors with the exception of Healthcare are looking bullish suggesting there is more upside ahead for this market. The Bessent pick by Trump for Treasury Secretary was applauded and we could see more followthrough with small- and mid-caps likely to outperform further.
Reader Request Day comes early this week due to the Thanksgiving holiday so be sure to send in your symbols soonest. A reminder there will be no Diamond Mine trading room this week, but the Recap will go out as usual on Friday afternoon/evening.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": CBRL, CUZ, STT and TREX.
Runner-ups: CNK, CG, HAE, MC, DXCM, IRM, O, DIGI, DRI and PVH.
SCHEDULE FOR THIS WEEK: There will be no Diamond Mine this week due to Thanksgiving. I will do four "Diamonds in the Rough" on Monday and three ETF picks on Tuesday with three Reader Requests falling on Wednesday this week. The DP Diamonds Recap will be published on Friday.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (11/22/2024):
Topic: DecisionPoint Diamond Mine (11/22/2024) LIVE Trading Room
Recording & Download Link
Passcode: November#22
REGISTRATION for 12/6/2024:
When: December 6, 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 11/25. 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.
Cracker Barrel Old Country Store, Inc. (CBRL)
EARNINGS: 2025-02-18 (BMO)
Cracker Barrel Old Country Store, Inc. engages in the operation and development of restaurant and retail outlets. The format of its stores consists of a trademarked rustic old country-store design that offers restaurant menu featuring home-style country food. The company was founded by Dan W. Evins on September 19, 1969 and is headquartered in Lebanon, TN.
Predefined Scans Triggered: New CCI Buy Signals, P&F Bullish Catapult, Stocks in a New Uptrend (ADX), Moved Above Upper Bollinger Band, Parabolic SAR Buy Signals, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
CBRL is up +0.65% in after hours trading. It had a heck of a rally today and I am looking for followthrough. The chart caught my eye due to the large rounded bottom base. It managed to close just above overhead resistance and above the 200-day EMA. The RSI is not overbought yet despite today's strong rally. The PMO is nearing a Crossover BUY Signal above the zero line. Stochastics just entered positive territory. Relative strength is improving slightly for the group, CBRL has been performing well against the group so it is outperforming the SPY right now. I've set the stop around the 20-day EMA at 7.8% or $47.89.
This is definitely a reversal candidate so there is some inherent risk associated with this one, but the upside potential is pretty hard to pass up. I'm not sure it will reach that level, but it certainly isn't out of the question if it can continue to move out of its declining trend. This small breakout is confirming a bullish falling wedge chart pattern. The weekly RSI is not overbought and the weekly PMO is rising strongly. The StockCharts Technical Rank (SCTR) is not quite in the hot zone* yet, but it is close enough to be bullish.
*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.
Cousins Properties, Inc. (CUZ)
EARNINGS: 2025-02-05 (AMC)
Cousins Properties, Inc. engages in the development, acquisition, leasing and management of real estate assets. The firm invests in urban office towers located in Sunbelt markets. It operates through the Office and Non-Office segments. The company was founded by Thomas G. Cousins in 1958 and is headquartered in Atlanta, GA.
Predefined Scans Triggered: Stocks in a New Uptrend (Aroon), Filled Black Candles, Parabolic SAR Buy Signals, P&F Double Top Breakout and New 52-week Highs.
CUZ is unchanged in after hours trading. This one caught my eye due to the bullish ascending triangle (flat top, rising bottoms). It implies a breakout ahead. The RSI is positive and not overbought. The PMO is rising toward a Crossover BUY Signal. I note that the OBV bottoms are rising, confirming the current rising trend. Stochastics are rising toward 80. The group is now starting to see outperformance. CUZ tends to be a leader within the group and it is currently outperforming the SPY. The stop doesn't have to be set too deeply. I opted for 6.8% or $29.73.
We have a nice rounded bottom basing pattern on the weekly chart and we can a breakout above overhead resistance. The weekly RSI is getting overbought, but that condition doesn't seem to be a problem of late. The weekly PMO is rising well above the zero line and the SCTR is in the hot zone. I've marked upside potential at 15%, but we could certainly see a breakout at the level.
State Street Corp. (STT)
EARNINGS: 2025-01-17 (BMO)
State Street Corp. engages in the provision of financial services to institutional investors. It operates through the Commercial and Financial Loans, and Commercial Real Estate Loans segments. The company was founded in 1792 and is headquartered in Boston, MA.
Predefined Scans Triggered: Moved Above Upper Keltner Channel, New 52-week Highs, Moved Above Upper Bollinger Band, Stocks in a New Uptrend (Aroon), Moved Above Upper Price Channel and P&F Double Top Breakout.
STT is up +0.52% in after hours trading. This should be a winner that keeps on winning given the surge in Financial stocks. STT has been on a solid rising trend since August. That has flattened out the PMO suggesting pure strength in the move. We now have yet another breakout move. The RSI is not overbought just yet. The PMO is on a new Crossover BUY Signal. Stochastics are almost above 80 and the group is really outperforming right now. While STT is only performing in line with the group, it is still outperforming the SPY by quite a bit. The stop is set at the 50-day EMA at 7.3% or $91.57.
We have a breakout from a long-term trading range with a strongly rising weekly PMO. The weekly RSI is overbought so we could see some consolidation along this new support level. The SCTR is well within the hot zone suggesting relative strength among large-caps. Consider a 17% upside target to about $115.58.
Trex Co., Inc. (TREX)
EARNINGS: 2025-02-24 (AMC)
Trex Co., Inc. engages in the manufacture of wood-alternative decking and railing. Its products include deck framing and drainage, outdoor lighting, furniture, pergola and outdoor kitchens, fencing, collections, and accessory hardware. It operates through the following segments Trex Residential Products and Trex Commercial Products. The Trex Residential segment offers Fencing, Railing, Decking and Accessories. The Trex Commercial Products segment offers Architectural Railing System, Aluminum Railing Systems, Staging Equipment and Accessories. The company was founded by Andrew U. Ferrari and Roger A. Wittenberg on September 4, 1998, and is headquartered in Winchester, VA.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Keltner Channel, Ichimoku Cloud Turned Green, Moved Above Upper Bollinger Band, Stocks in a New Uptrend (Aroon), Moved Above Upper Price Channel, Parabolic SAR Buy Signals, Runaway Gap Ups, P&F Double Top Breakout and P&F Triple Top Breakout.
TREX is up +0.52% in after hours trading. I liked today's strong breakout on this reversal candidate. We have a new rising trend out of the August low. This was a forceful breakout above the 200-day EMA and horizontal resistance. The RSI is close to overbought on today's rally so we could end up seeing some pullback that would make this one even more interesting. The PMO has whipsawed into a Crossover BUY Signal above the zero line. Stochastics are rising strongly. The group is outperforming and is really starting to outperform in the last week. TREX is beginning to outperform both the group and the SPY. I've set the stop as close to the 20-day EMA as I could get at 7.3% or $71.47.
The large cup with hand pattern caught my eye immediately on the weekly chart. This is a breakout from that handle. The weekly RSI is positive and not at all overbought. The weekly PMO is on a new Crossover BUY Signal. The SCTR is not in the hot zone yet, but it is making its way up toward it. Upside potential for the pattern takes price up nearly 33%.
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 have all four on my radar for purchase.
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