Yesterday I didn't get many symbols out of my scans and was left with a handful of okay stocks not great ones. Well, one of them underwent a price shock today. Yahoo Finance had news that Bausch and Lomb (BLCO) had some kind of acquired a new company, Elios Vision. Here's the link to the news story. It sounded like good news but it was not well received by investors. Consequently we saw a price shock of over 12% decline today. There was no way of knowing this was going to happen. It is just one of those things we have to deal with as investors. The good news is that I know that no one got in at the higher price it closed at yesterday as it gapped down on the open today. Best to leave this one alone. The spreadsheet will unfortunately take a hit.
The ETF Scans did not turn up much. Crude Oil and Commodities had a big showing, but given they are trading sideways with a directionless PMO, I passed.
One of today's selections is a Blue Chip Growth ETF (FBCG) that had a breakout today. If the market is going to move up, it will likely be on the backs of these stocks.
The other two I picked are Silver (SLV) and Gold Miners (GDX). They weren't in the scans, but I think both are ready to pop higher as Gold is starting to look bullish. I don't have any runner ups today.
Don't forget tomorrow is Reader Request Day. Take a moment and shoot me an email with any that have caught your interest of late. It can even be a portfolio position that you want my take on.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": FBCG, GDX and SLV.
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.
Fidelity Blue Chip Growth ETF (FBCG)
EARNINGS: N/A
FBCG is an actively-managed, non-transparent fund of fundamentally-selected global growth stocks. The fund utilizes the Fidelity non-transparent model. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Green, Moved Above Upper Keltner Channel, P&F Double Top Breakout and P&F Bullish Triangle.
FBCG is up +4.98% in after hours trading. That's a lot to be up after hours, it'll be interesting to see if any of that carries over to tomorrow. We have a tiny little bull flag formation with today's rally basically confirming the pattern. The RSI is positive and not yet overbought. The PMO has surged (bottomed) above the signal line. Stochastics have turned back up while holding above 80. Relative strength is increasing against the SPY. I've set the stop at the 50-day EMA at 6.7% or $44.94.
The weekly chart is favorable with a breakout and continued rising trend. The weekly RSI is positive and not quite overbought (although overbought conditions don't seem to be a problem for this one). The weekly PMO is rising on a Crossover BUY Signal that occurred well above the zero line. The StockCharts Technical Rank (SCTR) is at the top of the hot zone*. Consider a 17% upside target to about $56.36.
*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.
VanEck Vectors Gold Miners ETF (GDX)
EARNINGS: 2025-01-10 (BMO)
GDX tracks a market-cap-weighted index of global gold-mining firms. Click HERE for more information.
Predefined Scans Triggered: Moved Above Upper Price Channel.
GDX is up +0.03% in after hours trading. I wasn't feeling that good about GDX yesterday as it was barely up while Gold was up well over 1%. That didn't seem to pose a problem as today GDX rallied strongly out of its tight trading range. Price also got above the 50-day EMA again. The RSI just moved into positive territory and the PMO is now creeping higher on a Crossover BUY Signal. It isn't the strongest PMO as it is still below the zero line but we have to start somewhere. I really like how participation has popped up again. Stochastics are rising in positive territory and we have a BULLISH Bias in the IT and LT based on the Silver/Golden Cross Indexes being above their signal lines. Relative strength happens to be picking up as well. The stop is set beneath support and the 200-day EMA at 8% or $35.96.
The weekly chart is mixed. Price is near the top of a trading range and thus vulnerable to a downturn if it gets back up there. That is still 14% away so there is still some upside to be had regardless of what it does at overhead resistance. It is in a rising trend. The weekly PMO did pause its decline, but we do want to see it rising. Consider a 17% upside target on a breakout to $45.74.
iShares Silver Trust (SLV)
EARNINGS: N/A
SLV tracks the silver spot price, less expenses and liabilities, using silver bullion held in London. Click HERE for more information.
Predefined Scans Triggered: None.
SLV is up +0.14% in after hours trading. I like Gold and I like Silver. Silver's chart is more bullish given the recent double bottom pattern. It has nearly met its upside target, but it could certainly move past that level. The RSI is positive and not at all overbought. The PMO is on a new Crossover BUY Signal. It is slightly below the zero line so we can't necessarily say this is new strength. It could be diminishing weakness. I'm counting on the strength. We can see volume has really picked up based on the rising OBV. There is interest here. Stochastics have turned back up near 80 and relative strength is rising. The stop is set at the 200-day EMA at 7.9% or $26.74.
I like the recent breakout and mechanical pullback to support at the top of the prior trading range. The weekly RSI is positive and not overbought. The weekly PMO is turning back up and the SCTR is nearly in the hot zone above 70. Consider a 17% upside target to about $33.98.
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 50% 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)
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