The scans are thinning out despite the market climbing higher today. In fact, the Diamond Dog Scan which comes up with shorting opportunities was quite robust. I nearly chose a short for today. We do have a very short-term declining trend in the market, but I decided to go with longs. If ETF Day doesn't turn up anything, I'll probably add a short then.
I wasn't pleased with the scan results but I did manage to find four interesting positions for your consideration. They have all the bullish earmarks I usually look for so we'll see how they shake out this week. Hopefully we'll get more results tomorrow for ETF Day. I didn't find enough symbols to give you runner-ups today.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": CF, DOCU, GDYN and SUPN.
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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.
CF Industries Holdings, Inc. (CF)
EARNINGS: 2025-02-19 (AMC)
CF Industries Holdings, Inc. engages in the manufacture and distribution of nitrogen fertilizer. The firm owns and operates nitrogen plants and serves agricultural and industrial customers through its distribution system. It operates through following segments: Ammonia, Granular Urea, UAN, AN, and Other. The Ammonia segment produces anhydrous ammonia. The Granular Urea segment offers granular urea. The UAN segment creates urea ammonium nitrate solution. The AN segment makes ammonium nitrate. The Other segment includes diesel exhaust fluid, nitric acid, urea liquor, and aqua ammonia. The company was founded in 1946 and is headquartered in Northbrook, IL.
Predefined Scans Triggered: P&F Double Top Breakout.
CF is down -0.86% in after hours trading. I was drawn to the strong rising trend channel. Note that price didn't have to test the rising bottoms trendline. That is a bullish sign. The RSI is in positive territory. The PMO is on the rise. It is flat as we have a nice little rising trend coming off a difficult decline. Stochastics are nearing positive territory. The sector isn't that healthy, but the group is showing some outperformance. CF is outperforming both the SPY and the group so relative strength is in its favor. I set the stop beneath the last low and just outside of the rising trend channel at 7.5% or $87.03.
We have a breakout above resistance and a nice rising trend leading toward prior highs. The weekly RSI is positive and the weekly PMO is on the rise above the zero line. The StockCharts Technical Rank (SCTR) has just entered the hot zone* above 70. There is nice upside potential.
*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.
Docusign, Inc. (DOCU)
EARNINGS: 2025-03-06 (AMC)
DocuSign, Inc. engages in the provision of cloud-based electronic signature solutions. Its cloud-based electronic signature platform helps companies and individuals securely collect information, automate data workflows, and sign anything. The firm automates manual and paper-based processes allowing users to manage all aspects of documented business transactions including identity management, authentication, digital signature, forms and data collection, collaboration, workflow automation, and storage. The firm's products include eSignature, CLM, Gen for Salesforce, Document Generation, Standards-Based Signatures, Notary and Web Forms. The company was founded by Thomas H. Gonser and Court Lorenzini in 2003 and is headquartered in San Francisco, CA.
Predefined Scans Triggered: None.
DOCU is down -0.61% in after hours trading. I liked the base that has been building here with the saucer shaped bottom. The RSI is positive and not overbought. The PMO is now on a Crossover BUY Signal. Stochastics are on the rise and are very close to 80. The Software group is starting to see some outperformance. I'm lukewarm on Technology, but this is a condition we'll want to keep an eye on given there are so many possibilities in the Software group. DOCU is a strong relative performer against the group and the SPY. The stop is set near the 50-day EMA at 7.9% or $88.84.
We have a breakout move from a long-term base. The weekly RSI is positive and not overbought. The weekly PMO is rising after bottoming above the signal line. The SCTR is very strong over 90%. I've set a target below the late 2021 low.
Grid Dynamics Holdings Inc. (GDYN)
EARNINGS: 2025-02-20 (AMC)
Grid Dynamics Holdings, Inc. provides digital engineering and information technology services. The firm core business is to deliver focused and complex technical consulting, software design, development, testing and internet service operations. It also helps organizations become more agile and create innovative digital products and experiences through its deep expertise in emerging technology, such as AI, data science, cloud computing, big data and DevOps, lean software development practices and a performance product culture. The company was founded by Victoria Livschitz in 2006 and is headquartered in San Ramon, CA.
Predefined Scans Triggered: Improving Chaikin Money Flow, Moved Above Upper Bollinger Band and Moved Above Upper Price Channel.
GDYN is down -1.63% in after hours trading so we could get a better entry. We have a nice rally off support. I'd prefer it not to be so close to overhead resistance, but selections were slim as I said. The RSI looks good in positive territory and the PMO is giving us a Crossover BUY Signal well above the zero line. Stochastics are rising above 80. This is another Software company. GDYN has been outperforming the group and the SPY for some time. The stop is set beneath the 20-day EMA at 7.8% or $21.55.
This is a very strong area of overhead resistance so it wouldn't be surprising if the stock were to see some turbulence as it attempts a breakout. The weekly RSI is unfortunately overbought so the breakout indeed may take time. The weekly PMO is very favorable on its rise well above the zero line. The SCTR is at the top of the hot zone. If we get the breakout, there is some very nice upside potential.
Supernus Pharmaceuticals, Inc. (SUPN)
EARNINGS: 2025-02-25 (AMC)
Supernus Pharmaceuticals, Inc. engages in the development and commercialization of products for the treatment of central nervous system diseases. It offers Trokendi XR, Oxtellar XR, APOKYN, XADAGO, and MYOBLOC products. The company was founded by Jack A. Khattar on March 30, 2005, and is headquartered in Rockville, MD.
Predefined Scans Triggered: Elder Bar Turned Green, New CCI Buy Signals, New 52-week Highs, Moved Above Upper Bollinger Band, Moved Above Upper Price Channel, Parabolic SAR Buy Signals, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
SUPN is down -1.50% in after hours trading so it is taking back some of today's giant gain. The RSI is back in positive territory and we have a new PMO Crossover BUY Signal. The PMO is flat above the zero line implying pure strength. Stochastics have turned back up in positive territory. The group is improving and I like the Health Care sector. SUPN is showing strength against the SPY and is in line with the industry group. Since the group is outperforming, that is just fine. The stop is set beneath the 50-day EMA at 7.9% or $36.84.
We have a large bullish double bottom on the weekly chart and a strong rising trend on the confirming breakout. The weekly Rai is positive and not yet overbought. The weekly PMO is rising well above the zero line on a Crossover BUY Signal. Cherry on top is the SCTR sitting in the hot zone. Consider a 17% upside target to about $46.80.
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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 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.
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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.
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Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
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