I won't say that these two industry groups were dominant as there were others, but when I narrowed down my selections today I had two stocks from each group.
The Home Construction industry group was prominent and I was able to find one that is outperforming the industry group right now. The other group was Retail REITs. I opted to pick the one with the higher PMO value.
I was careful today to not pick any stocks reporting earnings in the next week. I don't want any "Diamond in the Rough" earnings surprises as we've seen over the past two weeks.
I was about to present Arch Coal (ARCH) today but I realized I had put it in on Reader Request Day. Today it hit the scans and the chart looks very good right now. You may want to take a quick glance at the chart. It busted a double top pattern and had a bullish engulfing candlestick.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": CVCO, ENVA, KIM and VMI.
Runner-ups: KRG, FTDR, MTD and ORA.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (11/1/2024):
Topic: DecisionPoint Diamond Mine (11/1/2024) LIVE Trading Room
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When: November 8, 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 11/4. 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.
Cavco Industries, Inc. (CVCO)
EARNINGS: 2025-01-30 (AMC)
Cavco Industries, Inc. engages in the development of residential modular structures. It offers manufactured homes, modular homes, park model RVs and cabins, commercial structures, mortgage lending, and insurance. The firm's brands include Cavco, Fleetwood, Palm Harbor and Fairmont, Friendship, Chariot Eagle and Destiny. The company operates through following segments: Factory-Built Housing, which includes wholesale and retail systems-built housing operations and Financial Services, which include manufactured housing consumer finance and insurance. It also designs and produces factory-built housing products primarily distributed through a network of independent and Company-owned retailers. The company was founded in 1965 and is headquartered in Phoenix, AZ.
Predefined Scans Triggered: Moved Above Upper Keltner Channel, New 52-week Highs, Moved Above Upper Price Channel and P&F double Top Breakout.
CVCO is up +0.24% in after hours trading. I primarily liked the breakout on the daily chart. It had already gapped up on earnings so they were well received and saw some upside follow through today. The RSI is positive and not overbought yet. There is a new PMO Crossover BUY Signal and Stochastics are above 80 where we want them. Relative strength is improving for the Home Construction group and CVCO is outperforming the group by a mile right now. Over time it has also performed well against the group. It is doing very well against the SPY based on the big gap up move. I've set the stop beneath support, near the 50-day EMA at 7.9% or $421.54.
The weekly chart is very positive with a solid rising trend and a breakout from the prior trading zone. The weekly RSI is positive and not overbought. The weekly PMO has surged (bottomed) above the signal line and the StockCharts Technical Rank (SCTR) is in the hot zone* above 70. Consider a 17% upside target to about $535.51.
*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.
Enova International, Inc. (ENVA)
EARNINGS: 2025-01-28 (AMC)
Enova International, Inc. engages in the provision of online financial services. Its products and services include short-term consumer loan, line of credit accounts, instalment loans, receivables purchase agreements, credit services organization program, bank program, and decision management platform-as-a-service & analytics-as-a-service. It caters non-prime credit consumers and small businesses in the United States and Brazil. The company was founded by Albert Goldstein and Alexander Goldstein in 2003 and is headquartered in Chicago, IL.
Predefined Scans Triggered: Moved Above Upper Bollinger Band.
ENVA is up +0.62% in after hours trading. We have a breakout above resistance and a nice rising trend channel that price is coming off the bottom of. The RSI is not yet overbought and the PMO is on a new Crossover BUY Signal. Note also that the PMO is flat above the signal line implying pure strength. Stochastics have turned back up and relative strength is solid across the board. The stop is set below support and near the 50-day EMA at 7.8% or $84.80.
The weekly chart shows a strong rising trend with a breakout. The weekly RSI is unfortunately overbought, but it can hold those conditions for a few weeks or more. The weekly PMO has surged above the signal line and the SCTR is at the top of the hot zone. Consider a 17% upside target to about $107.62.
Kimco Realty Corp. (KIM)
EARNINGS: 2025-02-13 (BMO)
Kimco Realty Corp. is a real estate investment trust company, which engages in the ownership and operation of open-air shopping centers. It also specializes in shopping center acquisitions, development and management. The company was founded by Milton Cooper and Martin S. Kimmel in 1973 and is headquartered in Jericho, NY.
Predefined Scans Triggered: Stocks in a New Uptrend (ADX), New CCI Buy Signals and P&F Double Top Breakout.
KIM is up +0.04% in after hours trading. I like this reversal off the 20-day EMA and the strong rising trend out of the May low. This is also a nice rounded bottom base. The RSI is positive and not overbought. The PMO is on a new Crossover BUY Signal. Stochastics are rising in positive territory. The group has been performing in line with the SPY which is acceptable. I like that KIM is outperforming both the group and the SPY. I've set the stop between the 50-day EMA and support at 7.2% or $22.87.
I very much like the breakout from a long-term trading range. The weekly RSI isn't overbought just yet and the weekly PMO is rising above the zero line and signal line. The SCTR is in the hot zone. Consider a 17% upside target to about $28.84.
Valmont Industries, Inc. (VMI)
EARNINGS: 2025-02-19 (AMC)
Valmont Industries, Inc. engages in the manufacture of products and services for infrastructure and agriculture markets. It operates through the Infrastructure and Agriculture segments. The Infrastructure segment includes five primary product lines such as Transmission, Distribution, and Substation, Lighting and Transportation, Coatings, Telecommunications, and Renewable Energy. The Agriculture segment produces mechanized irrigation equipment and related services. The company was founded by Robert B. Daugherty in 1946 and is headquartered in Omaha, NE.
Predefined Scans Triggered: Elder Bar Turned Green and New CCI Buy Signals.
VMI is down -1.94% in after hours trading which is disappointing, but it would offer a better entry. I liked the rebound off support and the third follow-through day of rally. Price is holding above the 20-day EMA quite nicely. The RSI is positive and not overbought. The PMO has surged above the signal line well above the zero line. Stochastics are rising again. Relative strength is showing improvement over time. The stop is set near the 50-day EMA at 7.9% or $300.59.
Overhead resistance is nearing and that could be stumbling point for VMI, but ultimately we should see a breakout given the very positive weekly PMO and SCTR. The weekly RSI is overbought, but we have seen in the past where it holds that condition for weeks. Consider a 17% upside target to about $381.86.
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