I'm still confounded by the lack of results in my Diamond Dog Scan which finds shorting opportunities. I decided to do a PMO negative Crossover Scan to beef up the results. It helped, I found one short from Diamond Dog and one from the negative PMO Crossover Scan.
I do think the market has an opportunity to snapback after the declines we've recently endured so I decided to include two longs with the two shorts to cover all the bases.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": IART, MARA (Short), NOVT (Short) and PLMR.
Runner-ups: DEA (Short), JACK (Short), CALM and COLL.
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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.
Integra LifeSciences Holdings Corp. (IART)
EARNINGS: 2025-05-05 (BMO)
Integra LifeSciences Holdings Corp. engages in the provision of regenerative tissue technologies and neurological solutions dedicated to limiting uncertainty for clinicians. It operates under the Codman Specialty Surgical (CSS) and Tissue Technologies (TT) segments. The CSS segment includes technologies and instrumentation used for neurosurgery, neurocritical care, and otolaryngology. The TT segment focuses on complex wound surgery, surgical reconstruction, and peripheral nerve repair. The company was founded by Richard E. Caruso in 1989 and is headquartered in Princeton, NJ.
Predefined Scans Triggered: Elder Bar Turned Green, Bullish MACD Crossovers and Bullish 50/200-day MA Crossovers.
IART is unchanged in after hours trading. I liked the double bottom pattern coming off strong support. The minimum upside target of the pattern implies an impending breakout. The RSI just moved into positive territory and the PMO is nearing a Crossover BUY Signal. It isn't that far beneath the zero line. Stochastics are rising again. Relative strength studies are very positive with the group and IART all outperforming the SPY. IART is also showing leadership within the group. The stop is set arbitrarily at 7.8% or $22.08.
It's not a textbook reverse head and shoulders but in any case, I would say it is a bottoming formation. The weekly RSI just entered positive territory and the weekly PMO has surged above the signal line. The StockCharts Technical Rank (SCTR) is well within the hot zone* above 70. We're counting on a breakout here.
*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.
Marathon Digital Holdings Inc (MARA) - SHORT
EARNINGS: 2025-05-08 (AMC)
MARA Holdings, Inc. is a digital asset technology company, which engages in mining cryptocurrencies with a focus on the Bitcoin ecosystem. It also deals with owning and operating bitcoin mining facilities or data centers, selling proprietary software or technology to third parties operating in the Bitcoin ecosystem, offering advisory and consulting services to support Bitcoin mining ventures in domestic and international jurisdictions, and generating electricity from renewable energy resources or methane gas capture to power Bitcoin mining projects. The company was founded on February 23, 2010 and is headquartered in Fort Lauderdale, FL.
Predefined Scans Triggered: P&F Double Bottom Breakdown, P&F Bullish Signal Reversal and Parabolic SAR Sell Signals.
MARA is up +0.15% in after hours trading. It is currently in a declining trend after a failed rally attempt. It is a Bitcoin miner and thus it probably is sensitive to Bitcoin prices. Bitcoin still looks quite bearish so I suspect this one has further to fall. The RSI is negative and not oversold. The PMO has topped well below the zero line and is nearing a Crossover SELL Signal. Stochastics have topped and have now moved into negative territory. Relative strength for the group is rising which is somewhat of a problem. At this point it is beginning to underperform the group and the SPY. When Bitcoin turns around, this might be a good one to have in your back pocket. The upside stop is set arbitrarily at 7.6% or $14.33.
It is sitting on strong support so if we get an upside reversal, you won't want to hold on too long as it could be readying to go back to the top of its range. The indicators are very poor so it is hard to imagine it will reverse here, but we've seen it. The weekly RSI is negative and falling. The weekly PMO is in decline on a Crossover SELL Signal. The SCTR is in the basement. Downside potential is excellent. I think it will require more downside on Bitcoin to get there though.
Novanta Inc. (NOVT) - SHORT
EARNINGS: 2025-05-06 (BMO)
Novanta, Inc. engages in the provision of core technology solutions to healthcare and advanced industrial original equipment manufacturers. It operates through the following segments: Photonics, Vision, and Precision Motion. The Photonics segment designs, manufactures, and markets photonics-based solutions, including laser scanning and laser beam delivery, CO2 laser, continuous wave and ultrafast laser, and optical light engine products. The Vision segment offers a range of medical grade technologies, including medical insufflators, pumps and related disposables, surgical displays and operating room integration technologies, optical data collection and machine vision technologies, radio frequency identification technologies, thermal printers, spectrometry technologies, and embedded touch screen solutions. The Precision Motion segment includes optical encoders, precision motor and motion control technology, air bearing spindles, and precision machined components to customers. The company was founded in 1968 and is headquartered in Bedford, MA.
Predefined Scans Triggered: Moved Below Lower Bollinger Band and New CCI Sell Signals.
NOVT is unchanged in after hours trading. This is a terrible looking chart and thus a good shorting candidate. We have a broken level of support on a big decline. There is also a solid declining trend. The RSI is negative and not oversold. The PMO has given us a new Crossover SELL Signal. Stochastics are dropping in negative territory. The group and the sector for that matter are underperforming the market. NOVT is traveling in line with the market which is okay given the market is in a declining trend. I don't like that it is outperforming its group right now, but relative strength isn't a primary indicator for me. We'll see how it does. I've set the upside stop above resistance at 7.2% or $146.37.
We broken support on the weekly chart and no sign of support until the 2023 low. The weekly RSI is negative and not oversold yet. The weekly PMO is in decline in negative territory. The SCTR is definitely outside of the hot zone. I'm looking for a drop to that prior support level.
Palomar Holdings, Inc. (PLMR)
EARNINGS: 2025-05-01 (AMC)
Palomar Holdings, Inc. is a specialty insurance company, which engages in the provision of property and casualty insurance products to individuals and businesses. The firm focuses on the residential and commercial earthquake markets in earthquake-exposed states such as California, Oregon, and Washington and states with exposure to the New Madrid Seismic Zone. It offers property and casualty insurance. The company was founded by Armstrong Mac and Fisher Heath in February 2014 and is headquartered in La Jolla, CA.
Predefined Scans Triggered: Elder Bar Turned Green, New CCI Buy Signals.
PLMR is down -0.01% in after hours trading. I liked the recent breakout. I'm not really counting the top of the filled black candlestick as resistance necessarily as price did close right on prior resistance on that day. We have a short-term rising trend and a breakout. The RSI is positive and not overbought yet. The PMO has surged above the signal line. Stochastics have reversed higher. Relative strength is outstanding for the group and PLMR is showing leadership within it. It is also outperforming the SPY by a mile. The stop is set beneath the 20-day EMA at 7.5% or $121.36.
It is a strong rising trend coming out of the prior trading range. The rally is getting a bit vertical so a pullback isn't out of the question. The weekly RSI is very positive. The weekly PMO is on a Crossover BUY Signal and I note that it is flat above the zero line implying pure strength. The SCTR is at the top of the hot zone. Consider a 17% upside target to about $153.51.
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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 10% 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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