It's Reader Request Day! Considering the market has been in a steady uptrend I have to say that pickings are slim. Readers clearly are struggling to find good setups just as I am. The market did manage a small decline today while mid-caps and small-caps were hit much harder after their strong run higher. I sense that we could be entering a difficult time for the market.
Today's requests look pretty good considering the choices we have out there. They all had the earmarks of a "Diamond in the Rough". Be sure to check out some of the runner-ups, all of them look interesting. Enjoy today's selections!
Tomorrow is the Diamond Mine trading room so be sure and register! Remember, if you can't attend, the video is available for review and download at the links provided.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": COHR, GLW and RRGB.
Other requests: FIVE, BITU, WULF, ERIC, TSM and NWG.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (11/22/2024- No Recording on 11/29):
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
Register in advance for this webinar HERE
After registering, you will receive a confirmation email containing information about joining the webinar.
Below is the latest free DecisionPoint Trading Room recording from 12/2. 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.
Coherent Corp. (COHR)
EARNINGS: 2025-02-05 (AMC)
Coherent Corp. engages in the development, refinement, manufacturing, and marketing of engineered materials, opto-electronic components and devices, and lasers for use in the industrial, communications, electronics, and instrumentation markets. It operates through the following segments: Networking, Materials, and Lasers. The Networking segment leverages compound semiconductor technology platforms and deep knowledge of end-user applications. The Materials segment markets engineered materials and optoelectronic devices. The Lasers segment serves industrial customers in semiconductor capital equipment, display capital equipment, precision manufacturing, and aerospace and defense, as well as instrumentation customers in life sciences and scientific research. The company was founded by Carl J. Johnson in 1971 and is headquartered in Saxonburg, PA.
Predefined Scans Triggered: P&F Double Top Breakout and P&F Bullish Triangle.
COHR is down -0.15% in after hours trading so the pullback may not quite be finished. We had a breakout yesterday and today saw a mechanical pullback. I just wish it hadn't pulled back below the current resistance level. The RSI is falling, but is still positive and not overbought. The PMO is on a new Crossover BUY Signal above the zero line. Stochastics are now above 80. Relative strength is excellent across the board. COHR has been a leader in this industry group. The stop is set between the 20/50-day EMAs at 7.7% or $100.29.
The weekly chart is favorable with a nice long-term breakout. The rising trend is intact and price is staying above new support. The weekly RSI is positive and not overbought. The weekly PMO is rising on a Crossover BUY Signal. The StockCharts Technical Rank (SCTR) is at the top of the hot zone*. Consider a 17% upside target to about $127.13.
*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.
Corning, Inc. (GLW)
EARNINGS: 2025-02-04 (BMO)
Corning, Inc. engages in the provision of glass for notebook computers, flat panel desktop monitors, display televisions, and other information display applications, carrier network and enterprise network products for the telecommunications industry, ceramic substrates for gasoline and diesel engines in automotive and heavy-duty vehicle markets, laboratory products for the scientific community and polymer products for biotechnology applications, optical materials for the semiconductor industry and the scientific community, and polycrystalline silicon products and other technologies. It operates through the following segments: Optical Communications, Display Technologies, Specialty Materials, Environmental Technologies, and Life Sciences. The Optical Communications segment is classified into two main product groupings: carrier and enterprise network. The carrier network group consists of products and solutions for optical-based communications infrastructure for services such as video, data, and voice communications. The enterprise network group consists primarily of optical-based communication networks sold to businesses, governments, and individuals for their own use. The Display Technologies segment manufactures glass substrates for flat panel displays, including organic light-emitting diodes and liquid crystal displays that are used primarily in televisions, notebook computer, desktop monitors, tablets, and handheld devices. The Specialty Materials segment is involved in the manufacture of products that provide material formulations for glass, glass ceramics and crystals, and precision metrology instruments and software. The Environmental Technologies segment focuses on manufacturing ceramic substrates and filter products for emissions control in mobile applications. The Life Sciences segment develops, manufactures, and supplies laboratory products. The company was founded by Amory Houghton Sr. in 1851 and is headquartered in Corning, NY.
Predefined Scans Triggered: Moved Above Upper Price Channel.
GLW is unchanged in after hours trading. I liked today's breakout from the recent trading range. I also like the consistent rising trend that is not parabolic or vertical. The RSI is positive and not yet overbought. The PMO is flat above the zero line indicating pure strength. The PMO itself is on a Crossover BUY Signal. Stochastics are holding above 80. Relative strength for the group is excellent and consequently that has lifted performance against the SPY for GLW. It is performing mostly in line with the group. The stop is set as close to support as I could get without making it too deep. I chose 7.8% or $45.87.
This is another strong weekly chart. We have a breakout from a long-term trading range and a steady rising trend. The weekly RSI is somewhat overbought, but it can hold that condition for a few more weeks. The weekly PMO is on a Crossover BUY Signal and is well above the zero line. The SCTR is in the hot zone. Consider a 17% upside target to about $58.22.
Red Robin Gourmet Burgers Inc. (RRGB)
EARNINGS: 2025-03-05 (AMC)
Red Robin Gourmet Burgers, Inc. develops, operates, and franchises full-service restaurants North America. It serves a variety of salads, soups, appetizers, other entrees, desserts, signature alcoholic and non-alcoholic beverages. The company was founded in September 1969 and is headquartered in Englewood, CO.
Predefined Scans Triggered: Stocks in a New Uptrend (ADX) and Entered Ichimoku Cloud.
RRGB is up +3.45% in after hours trading which makes up for today's big loss if it holds. We have a large bullish cup with handle pattern and a breakout from the handle. Granted price dropped back below the declining tops trendline to close, but it did get above it. The RSI is positive and not overbought. It dropped today due to the decline. The PMO has just triggered a Crossover BUY Signal. Stochastics are rising again in positive territory. Relative strength is great across the board. The stop is set at the 50-day EMA at 7.8% or $5.34. This is a low priced stock so position size wisely.
The weekly chart is starting to develop. It appears that price is ready to break out of a bullish falling wedge. The declining trend is still essentially intact though so it is early. The weekly RSI is now in positive territory and the weekly PMO is on the rise toward the zero line. The SCTR needs some help. This has been a beat down stock so it has a lot of work to do, but if it can, it is a delicious gain.
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'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