It's the start of a new week and the hope is that the fires in neighboring Los Angeles will calm further. Carl and I are safe but under a fire watch (as is most of Southern California). Winds seem to be okay for now, but they will likely pick up later tonight. Thank you to everyone who has been checking in on us. It has been unsettling to say the least. The worst of it for us was loss of power (Carl) for a few days (generator got him through) and lost internet service which is why we canceled our trading rooms. That has been restored so we feel some semblance of normalcy right now.
The scans were plentiful today so I do have a nice long runner-ups list for you. I decided to take a chance on Aluminum with CENX. It is seeing an excellent reversal and could be set for a nice run higher. It is a reversal candidate so there is risk associated with it, but I may take a chance on it anyway with a tight stop. We'll see.
Stay safe if you're in the SoCal area and heed warnings.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": ALGT, CENX, LMAT and OKE.
Runner-ups: GBX, PCRX, ATGE, SANM, AYI, FULT, PRI, DE, ARCB and TOL.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (1/3/2025, no recording 1/10):
Topic: DecisionPoint Diamond Mine (1/3/2025) LIVE Trading Room
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Passcode: January#3
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When: January 17, 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 1/6 (No recording 1/13 or 1/27). 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.
Allegiant Travel Co. (ALGT)
EARNINGS: 2025-02-03 (AMC)
Allegiant Travel Co. engages in the provision of leisure travel services. It operates through the Airline and Sunseeker Resort segments. The Airline segment involves the scheduled service air transportation, ancillary air-related and third-party products and services, fixed fee contract air transportation, and other airline-related revenue. The Sunseeker Resort segment includes hotel rooms and suites for occupancy, group meeting facilities, food and beverage options, the Aileron Golf Course, and other resort amenities. The company was founded in January 1997 and is headquartered in Las Vegas, NV.
Predefined Scans Triggered: None.
ALGT is unchanged in after hours trading. I've had my eye on this one for awhile as it has been in a really nice rising trend. Airlines in general are acting bullish so you could go to your favorite. This one had the highest PMO value of all the stocks I looked at today and that was a big reason I picked it. The RSI is unfortunately overbought right now, but given the PMO Surge above the signal line today and the PMO being so flat above the zero line, there is pure strength here. Volume is coming in and Stochastics are above 80 and rising. Relative strength couldn't get much better for the group and ALGT. The stop is set beneath support at 7.3% or $93.59.
Upside potential also lured me to this stock. It is on a strong rising trend and should reach the top of this trading range. The weekly RSI is very overbought, but I am still looking for it to move higher from here. The weekly PMO is rising almost vertically and the StockCharts Technical Rank (SCTR) is at the top of the "hot zone"* above 70.
*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.
Century Aluminum Co. (CENX)
EARNINGS: 2025-02-19 (AMC)
Century Aluminum Co. is a producer of aluminum and operates aluminum reduction facilities, or smelters, in the United States and Iceland. Its products include standard ingots, T-ingot, extrusion billet, horizontal direct chill ingot, molten, slab, and sow. The company was founded in 1995 and is headquartered in Chicago, IL.
Predefined Scans Triggered: New CCI Buy Signals.
CENX is up +2.56% in after hours trading so we may be onto something here. The RSI is still in positive territory despite today's decline. The PMO has just had a PMO Crossover BUY Signal. I really liked the OBV positive divergence with price lows. It sets up for an extended rally. Stochastics are above 80. Relative strength is picking up for the group. Relative strength has been rising for CENX against the group and the SPY. The stop is set arbitrarily at 7.5% or $18.44.
We have a rising trend that is taking price back to the 2022 high. The weekly RSI is positive. The weekly PMO is in decline, but is decelerating. The SCTR is in the hot zone. Upside potential is excellent.
LeMaitre Vascular Inc. (LMAT)
EARNINGS: 2025-02-25 (AMC)
LeMaitre Vascular, Inc. engages in the provision of medical devices and human tissue cryopreservation services. The company focuses on the design, marketing, sales, service, and technical support of medical devices and implants for the treatment of peripheral vascular disease. Its products include balloon catheters, carotid shunts, biologic patches, radiopaque marking tape, anastomotic clips, remote endarterectomy devices, laparoscopic cholecystectomy devices, vascular grafts, and powered phlebectomy. The company was founded by George D. LeMaitre on November 28, 1983 and is headquartered in Burlington, MA.
Predefined Scans Triggered: New CCI Buy Signals, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
LMAT is unchanged in after hours trading. I liked today's breakout above overhead resistance. It is in a small rising trend. It is technically an island formation so a gap up isn't out of the question. The RSI just moved into positive territory and the PMO is on a new Crossover BUY Signal. Stochastics did top, but they are comfortably above 80 for now. Relative strength lines are all rising for the group and LMAT. It is in Healthcare which I like right now. The stop is set beneath support at 7.5% or $88.66.
We have a strong weekly chart with a nice rising trend that continues to hold up. The weekly RSI is rising in positive territory and the SCTR is in the hot zone. I am not a fan of the weekly PMO but it is reacting to the recent crash is saw last quarter. I'll forgive it particularly given the strong rising trend.
Oneok, Inc. (OKE)
EARNINGS: 2025-02-24 (AMC)
ONEOK, Inc. engages in gathering, processing, fractionating, transporting, storing and marketing of natural gas. It operates through the following segments: Natural Gas Gathering and Processing, Natural Gas Liquids and Natural Gas Pipelines. The Natural Gas Gathering and Processing segment offers midstream services to producers in North Dakota, Montana, Wyoming, Kansas and Oklahoma. The Natural Gas Liquids segment owns and operates facilities that gather, fractionate, treat and distribute NGLs and store NGL products, in Oklahoma, Kansas, Texas, New Mexico and the Rocky Mountain region, which includes the Williston, Powder River and DJ Basins, where it provides midstream services to producers of NGLs and deliver those products to the two market centers, one in the Mid-Continent in Conway, Kansas and the other in the Gulf Coast in Mont Belvieu, Texas. The Natural Gas Pipelines segment provides transportation and storage services to end users. The company was founded in 1906 and is headquartered in Tulsa, OK.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, Moved Above Upper Price Channel and New CCI Buy Signals.
OKE is up +0.90% in after hours trading. I like this rebound off support at the October highs. It is beginning to pick up speed to the upside. The RSI is positive and not overbought. The PMO is on a new Crossover BUY Signal. Stochastics are above 80. Relative strength for the group is rising. I almost didn't pick this one because it is weak against the industry group, but ultimately I like Energy and this one looks ready to push forward now, it was a slow gainer on the rise in Crude. Ultimately it is doing well against the SPY so that is acceptable. The stop is set as close to support as possible at 8% or $97.55.
Other than the recent decline, the weekly chart looks mostly healthy. Price action shows a strong rising trend. The weekly RSI is positive. The weekly PMO is technically in decline but it has decelerated in anticipation of an upside reversal. The SCTR is well within the hot zone above 70. Consider a 17% upside target to about $124.07.
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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.
"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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