Well it is time to pivot. The great decline of January isn't materializing, not that we are out of the woods, but it is clear shorting the market is not what we need to do. This leaves this week's spreadsheet somewhat in jeopardy given my bearish approach the last two weeks.
I'm not comfortable expanding my portfolio, but it did seem prudent to add a few positions given the strength of the rally. However, I do note that price began to decline at lunch and took back much of today's gains. It may be rocky trading ahead.
I noticed some improvements under the hood on the Biotechnology (IBB) industry group and I had some hit the scan results today. Two came in under an obscure scan that I don't typically run. I think the charts are looking very interesting right now (ADMA & INCY). (Definitely not a recommendation, but FYI I've added INCY to my own portfolio.)
Be careful moving forward as I still see some weakness under the surface. Mega or large-cap positions should perform best if the market is going to continue to press higher. Positions should have stops set.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": ADMA, DELL, EXE and INCY.
Runner-ups: SNV, EME, RVTY, ALGT and ATGE.
Diamond Mine Trading Room:
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Topic: DecisionPoint Diamond Mine (1/3/2025) LIVE 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.
ADMA Biologics, Inc. (ADMA)
EARNINGS: 2025-02-26 (AMC)
ADMA Biologics, Inc. operates as a biopharmaceutical company, which is engaged in manufacturing, marketing, and developing specialty plasma-derived biologics. The firm operates through the following business segments: ADMA BioManufacturing, Plasma Collection Center, and Corporate. The ADMA BioManufacturing segment consists of immune globulin manufacturing and development operations. The Plasma Collection Center consists of source plasma collection facilities. The Corporate segment includes general and administrative overhead expenses. The company was founded by Adam S. Grossman and Jerrold B. Grossman on June 24, 2004 and is headquartered in Ramsey, NJ.
Predefined Scans Triggered: P&F Low Pole.
ADMA is up +0.99% in after hours trading. Price has reversed before having to test support which is bullish. We have three days of rally to hang our hat on and a breakout above both the 20/50-day EMAs. The RSI just moved into positive territory and the PMO is on its way up toward a Crossover BUY Signal. Stochastics are rising vertically in positive territory. Relative strength shows three rising trendlines suggesting we should see this stock continue to outperform. The stop is set as close to support as I could get it at 7.7% or $17.65.
We have a nice rising trend on the weekly chart with price beginning to rally after testing that rising trend. The weekly RSI is positive and the StockCharts Technical Rank (SCTR) is well within the hot zone* above 70. Unfortunately, the weekly PMO is still in decline so keep this one in the short-term timeframe.
*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.
Dell Technologies, Inc. (DELL)
EARNINGS: 2025-02-27 (AMC)
Dell Technologies, Inc. is a technology company, providing customers with a broad and innovative solution portfolio to help customers modernize their information technology (IT) infrastructure, address workforce transformation, and offer critical solutions that keep people and organizations connected. It operates through the following segments: Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG). The ISG segment includes servers, networking, and storage, as well as services and third-party software and peripherals that are closely tied to the sale of ISG hardware. The CSG segment includes designs for commercial and consumer customers of desktops, thin client products, and notebooks. The company was founded by Michael Saul Dell in 1984 and is headquartered in Round Rock, TX.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, New CCI Buy Signals, P&F Double Top Breakout and P&F Bearish Signal Reversal.
DELL is up +0.65% in after hours trading. We have a nice reversal off strong support that has shaped a small reverse head and shoulders pattern and has been confirmed with a move above the neckline. Price broke out above both the 20/50-day EMAs. The PMO is rising on a new PMO Crossover BUY Signal. Stochastics are rising strongly and should get above 80 soon which would signify internal strength. The industry group isn't doing that well, but Apple (AAPL), the leader within the group, is looking quite bullish right now and that should get the group to improve with it. DELL is already performing better within the group and against the SPY. The stop is set below the 200-day EMA at 7.3% or $115.55.
We technically have a long-term declining trend, but this reversal has set up a higher low for a new shorter-term rising trend. The weekly RSI is now in positive territory. The weekly PMO hasn't reversed yet, but does appear to be decelerating. The SCTR is not in the hot zone, but is at least beginning to move up. Keep this one in the short term.
Expand Energy Corporation (EXE)
EARNINGS: 2025-02-18 (AMC)
Expand Energy Corp. engages in the production and development of natural gas, oil, and natural gas liquids. Its operations include Haynesville, Northeast Appalachia, and Southwest Appalachia. The company was founded in 2024 and is headquartered in Oklahoma City, OK.
Predefined Scans Triggered: P&F Triple Top Breakout, New 52-week Highs and P&F Double Top Breakout.
EXE is up +0.08% in after hours trading. This is in Energy which is one primary reason I picked it. This area of the market is making a big comeback and I do expect higher prices to continue. This one caught my eye because it had a small breakout from a trading range. The RSI is positive and not overbought. The PMO is now on a new Crossover BUY Signal and is running flat suggesting pure strength in the current rally. The OBV is about to make a new high with price. Stochastics have turned up above 80. This is a strong relative performer against both the group and the SPY. We should get followthrough. The stop is set beneath support at 7.9% or $93.48.
Price has broken out on the weekly chart from a long-term trading range so it could be getting ready to form a new range. The weekly RSI is positive and not overbought. The weekly PMO is accelerating higher and the SCTR is in the hot zone above 70. Consider a 17% upside target to $118.75.
Incyte Corp. (INCY)
EARNINGS: 2025-02-11 (BMO)
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Predefined Scans Triggered: Elder Bar Turned Green and P&F Low Pole.
INCY is down -0.22% in after hours trading. The short-term declining trend has been broken and price rallied above both the 20/50-day EMAs. This rally is coming off strong support as well. The RSI just moved into positive territory and the PMO is rising toward a Crossover BUY Signal. Stochastics are rising strongly toward 80 and relative strength studies are positive with all relative strength lines rising. The stop is set at the 200-day EMA at 7.9% or $66.22.
Price is on its way to test the top of a long-term trading range. The rising trend looks healthy. The weekly RSI is positive and not overbought. The SCTR is almost in the hot zone above 70. The weekly PMO does look suspect so keep a close eye on this one until it looks as if it will turn back up. So far it is avoiding a Crossover SELL Signal.
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 30% 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.
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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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