It looks like Santa will be making an appearance this year. We still see plenty of weakness within the index that could push it lower, but for now we think the holiday cheer will keep the market elevated a bit longer.
I do not have a high confidence level in today's "Diamonds in the Rough" as the scans didn't turn out many symbols and these looked okay, not the usual 'great'. I also scanned for shorting opportunities, but wasn't really enamored with any of the symbols the Diamond Dog Scan came up with. The one I liked best for a short was Estee Lauder (EL), but I already presented that last Thursday.
Look forward to three ETFs tomorrow and Reader Requests (send them in if you can) on Thursday. There will be no Diamond Mine Trading Room on Friday as I have family in town. There will be a Diamond Mine on January 3rd.
Next week will run like this week with the exception being that we will have a trading room that Friday. If you have any questions (or symbol requests), email me soonest.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": DOCS, HLIT, VRSN and XRX.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (12/20/2024):
Topic: DecisionPoint Diamond Mine (12/20/2024) LIVE Trading Room
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Passcode: December#20
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When: January 3, 2025 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 12/23. 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.
Doximity Inc. (DOCS)
EARNINGS: 2025-02-06 (AMC)
Doximity, Inc. engages in the development and operation of an online platform for medical professionals. Its cloud-based software has the ability to enable users to collaborate with their colleagues, coordinate patient care, conduct virtual patient visits, stay up to date with the latest medical news and research, and manage their careers. The company was founded by Shari Buck, Konstantin Guericke, Nate Gross, and Jeffrey A. Tangney on April 16, 2010 and is headquartered in San Francisco, CA.
Predefined Scans Triggered: Filled Black Candles and P&F Double Top Breakout.
DOCS is down -0.29% in after hours trading. This one saw an excellent gap up on earnings, but the pullback was steep and it is now trying to get back to those prior heights. It looks good to do so. We have a small breakout above the prior top and price is headed toward a breakout. The RSI is positive and not yet overbought. The PMO is rising after bottoming well above the zero line. Volume is coming in. Stochastics are above 80. Relative strength for the group has been fading of late, but overall it is still seeing a rising trend. DOCS is outperforming the group and the SPY easily right now. The stop is set at the 20-day EMA at 7.9% or $53.58.
The weekly chart shows a solid rising trend that took price out of a sideways trading range. The weekly RSI is positive and not overbought yet. The weekly PMO is very strong reading over 20. The StockCharts Technical Rank (SCTR) is at the top of the hot zone*. I'm looking for a breakout but we'll see.
*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.
Harmonic, Inc. (HLIT)
EARNINGS: 2025-01-27 (AMC)
Harmonic, Inc. engages in the development and sale of video delivery software, products, system solutions, and services. It operates through the Video and Broadband segments. The Video segment sells video processing and production and playout services to cable operators, satellite and telecommunications pay-TV service providers, and broadcast and media companies. The Broadband segment offers solutions to cable operators broadband access solutions and related services, including cOS software-based broadband access solution, to broadband operators globally. The company was founded in June 1988 and is headquartered in San Jose, CA.
Predefined Scans Triggered: P&F Low Pole and Elder Bar Turned Blue.
HLIT is unchanged in after hours trading. It has been on a steady rising trend and has entered a new trading range. It hasn't done much since getting into the range, but the indicators are maturing and do suggest we will see some more upside at this point. The RSI is positive and not overbought. The PMO is rising above the zero line on a Crossover BUY Signal that came in oversold territory. Stochastics are rising in positive territory. Relative strength is outstanding for the group and HLIT which have been outperforming for months. The stop is set beneath support at 7.5% or $12.34.
This is not the best set up on the weekly chart as price is near the top of a longer-term trading range and is vulnerable to a pullback at the early 2024 high. On the bright side, it does look like it will challenge the top of the current trading given positive indicators. The weekly RSI just hit positive territory and the weekly PMO is nearing a Crossover BUY Signal above the zero line. The SCTR is now in the hot zone.
VeriSign, Inc. (VRSN)
EARNINGS: 2025-02-06 (AMC)
VeriSign, Inc. engages in the provision of critical Internet infrastructure and domain name registry services. It helps enable the security, stability, and resiliency of the Domain Name System and the Internet by providing Root Zone Maintainer services. The company was founded by D. James Bidzos on April 12, 1995 and is headquartered in Reston, VA.
Predefined Scans Triggered: None.
VRSN is up +0.27% in after hours trading. We have an excellent bounce off support and a strong rally that would encourage followthrough. The RSI is positive and not overbought. The PMO has surged above the signal line and Stochastics are rising toward 80 in positive territory. The group isn't performing that well right now, but overall it is still in a rising trend for relative strength. VRSN is showing excellent strength against the group and the SPY. The stop is set beneath the 200-day EMA at 7.1% or $185.76.
I like that price has entered back into a long-term trading range. It's a range we can trade given price is near the bottom. The weekly RSI is positive and the weekly PMO is rising above the zero line. The SCTR just entered the hot zone. I don't know that it will recapture those prior highs, but it does look lined up for at least a 13% rally if not more.
Xerox Holdings Corp. (XRX)
EARNINGS: 2025-01-30 (BMO)
Xerox Holdings Corp. is a workplace technology company, which builds and integrates software and hardware for enterprises. It operates through the Print and Other, and Financing (FITTLE) segments. The company was founded on March 11, 2019, and is headquartered in Norwalk, CT.
Predefined Scans Triggered: P&F Double Bottom Breakdown, Elder Bar Turned Green, New CCI Buy Signals, Bullish MACD Crossovers, Moved Above Upper Bollinger Band, Stocks in a New Uptrend (Aroon), Parabolic SAR Buy Signals, P&F Triple Bottom Breakdown and Entered Ichimoku Cloud.
XRX is down -0.51% in after hours trading. It was a spectacular rally today, one that may require some pullback so you may want to stalk this one before taking a plunge. We also haven't left the current trading range. This is an encouraging rally, but there is more work to do. It is also a reversal candidate and I am not excited about trying for reversals when the market is weak internally. We'll see how this one shapes up because the indicators are good. The RSI is now in positive territory and is not overbought. The PMO was yanked upward today and gave us a Crossover BUY Signal. Stochastics are rising strongly now. The group is struggling a bit now, but in general it still has a rising trend on relative strength. XRX is performing inline with the group and the SPY which is acceptable, but not optimum. The stop is set at the 20-day EMA at 7.8% or $8.71.
I like upside potential should it get to the top of the current trading range. The weekly RSI is not positive, but it is beginning to rise with price. The weekly PMO is bottoming. The SCTR is not in the hot zone yet, so this would be a short-term horizon trade.
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 35% 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