Thank you as usual to the usual suspects that sent in symbol requests today. There weren't many to choose from but I can see why when I look at the slim results I keep seeing on my Diamonds scans. In any case, I was able to find three symbols that look very interesting.
One of today's symbols is a Gold Miner. I'm still bullish on this group but they did have a bad day on the decline in Gold. I still like Gold so I'm including the Gold Miner. It is set up well, but if I'm wrong about Gold, you'll want to reduce exposure to this industry group. As noted yesterday, GDX is seeing new participation and looks ready to resume its rally. We'll see.
I'm not including EQT which was requested, but it was my first runner-up and was my alternate to AGI, the Gold Miner. The Energy sector is at a support level that could mean an upside reversal soon, but it hasn't slowed its decline yet so I decided to stay away from the Energy sector and EQT.
XNCR is another request, but unfortunately it has a sinking PMO and relative strength isn't up to snuff.
Thank you again for your contributions! I really like seeing stocks that are on your radar.
Tomorrow is the Diamond Mine trading room so be sure to register. I look forward to seeing you!
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": AGI, MLI and VIAV.
Other requests: EQT and XNCR
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (12/6/2024):
Topic: DecisionPoint Diamond Mine (12/6/2024) LIVE Trading Room
Recording & Download LINK
Passcode: December#6
REGISTRATION for 12/13/2024:
When: December 13, 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 12/9. 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.
Alamos Gold Inc. (AGI)
EARNINGS: 2025-02-19 (AMC)
Alamos Gold, Inc. engages in the exploration, development, mining and extraction of precious metals. It operates through the following segments: Young-Davidson, Mulatos, Island Gold, Elchanate, Kirazli and Corporate and Other. The company was founded on February 21, 2003 and is headquartered in Toronto, Canada.
Predefined Scans Triggered: Moved Below Ichimoku Cloud, P&F Low Pole and Elder Bar Turned Blue.
AGI is up +1.02% in after hours trading. I noticed a nearing Silver Cross of the 20/50-day EMAs. Price was down quite a bit today, but the rising trend channel is still intact. If it breaks down out of the channel, I wouldn't be too excited about holding it too much longer, but these Gold Miners do tend to be volatile. The RSI is positive despite today's drop. The PMO just entered positive territory heralding new strength. Stochastics did tip lower, but they are still quite elevated. Relative strength is picking up for the group and we can see AGI holds a leadership role given its outperformance of the group. It is also doing well against the SPY. The stop is set below the second November bottom at 7.7% or $18.04.
The weekly shows us that price rebounded on support and is headed back toward all-time highs. The current OHLC bar doesn't inspire confidence as it is a bearish shooting star, but it still has tomorrow to clear that condition before the weekly chart goes final. The weekly RSI is positive and not overbought. The weekly PMO is unfortunately still headed lower. The StockCharts Technical Rank (SCTR) did just make it into the hot zone* so there is a good outlook in the intermediate term. Consider a 17% upside target to about $22.87.
*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.
Mueller Industries Inc. (MLI)
EARNINGS: 2025-02-04 (BMO)
Mueller Industries, Inc. engages in the manufacture of copper, brass, aluminum, and plastic products. It operates through the following segments: Piping Systems, Industrial Metals, and Climate. The Piping Systems segment consists of Domestic Piping Systems Group, Great Lakes Copper, Heatlink Group, European Operations, Trading Group, Jungwoo-Mueller, and Mueller Middle East. The Industrial Metals segment includes Brass Rod, Impacts & Micro Gauge, and Brass Value-Added Products. The Climate segment offers Refrigeration Products, Westermeyer, Turbotec, Flex Duct, and Linesets, Inc. The company was founded on October 3, 1990 and is headquartered in Memphis, TN.
Predefined Scans Triggered: P&F Low Pole.
MLI is unchanged in after hours trading. I like the gap up move, but it does leave us open to a possible bearish reverse island. The indicators look good enough that I'm not that worried about that coming to pass, but it is a risk with this one. The RSI is positive just above net neutral (50). The PMO has decelerated, but it is still moving up. Stochastics look very good and this is one main reason I am not looking for a reverse island. Relative strength could be better for the group itself so that could cause some headwinds. It is starting to outperform the group and the SPY. The stop is set beneath support at 7.9% or $76.39.
The weekly chart shows an upside reversal off support. The weekly RSI looks good above net neutral (50), but unfortunately the weekly PMO is in decline. This is due to the steep sell-off earlier. I'm counting on the incredibly high reading on the weekly PMO. The SCTR is well within the hot zone. If it can get to prior all-time highs it would be a tidy 17.5% gain.
Viavi Solutions Inc. (VIAV)
EARNINGS: 2025-01-30 (AMC)
Viavi Solutions, Inc. engages in the provision of network test, monitoring, and assurance solutions for communications service providers, enterprises, network equipment manufacturers, government and avionics. It operates through the following segments: Network Enablement, Service Enablement, and Optical Security and Performance. The Network Enablement segment offers an integrated portfolio of testing solutions that access the network to perform build-out and maintenance tasks. The Service Enablement segment covers solutions and services primarily for communication service providers, and enterprises that deliver and/or operate broadband and IP networks (fixed and mobile) supporting voice, video, and data services as well as a wide range of applications. The Optical Security and Performance segment leverages its core optical coating technologies and volume manufacturing capability to design, manufacture, and sell products targeting anti-counterfeiting, consumer and industrial, government, healthcare, and other markets. The company was founded in 1979 and is headquartered in Chandler, AZ.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, Moved Above Upper Price Channel, New CCI Buy Signals and Moved Above Upper Keltner Channel.
VIAV is up +0.81% in after hours trading. The breakout looks great here on a powerful thrust upward. The RSI did just enter overbought territory, but I suspect it will hold that condition given the strong rising trend and breakout. Also, the PMO looks excellent as it has been flat above the zero line for some time indicating pure strength. It has a new PMO Crossover BUY Signal today. Stochastics are in positive territory and are angling up. The industry group has been on fire based on relative strength. It has been outperforming the group showing leadership and it is doing very well against the SPY. The stop is set beneath the 20-day EMA at 7.9% or $10.23.
It is getting very close to overhead resistance so it may consolidate, but again that thrust upward today suggests a breakout is nearing. The weekly RSI is not yet overbought. The weekly PMO is rising strongly now that price has broken out of a bullish falling wedge. The SCTR is in the hot zone. I'm not sure price will reach a 33% gain, but certainly we should be able to get 17% out of it.
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)
For more links, go to DecisionPoint.com