Whew! What a day in the market! I'm still waiting on some indicators to finalize. I think we could see a snapback tomorrow, but this does appear to be the beginning of a bear market. I don't want to spoil the DP Alert so I'll end my comments here.
Reader requests were all longs. I was really impressed with what readers found on such a terrible day of trading, but there will always be winners somewhere so maybe we've found some here.
One of the picks is overbought on the RSI and that does imply we could see a pause in its rally, but ultimately it does look good for some short-term gains in spite of it. It is in Consumer Finance industry group.
One choice was a Utility which I think will continue to rise given its defensive posture. The other is an Insurance stock that could see more upside moving forward.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": EZPW, HCI and XEL.
Other requests: CPK, VRSK, RELX, EWZ, IDA, PYLD, FIIG, ATO, NI, BMY, AMZN, DVN, BK, ALCH and AJG.
Diamond Mine Trading Room:
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Topic: DecisionPoint Diamond Mine (3/28/2025) 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.
EZCORP, Inc. (EZPW)
EARNINGS: 2025-05-07 (AMC)
EZCORP, Inc. engages in the provision of pawn services. The firm also sells merchandise, primarily collateral forfeited from pawn lending operations and used merchandise purchased from customers. It operates through the following segments: U.S. Pawn, Latin America Pawn, and Other Investments. The U.S. Pawn segment includes EZPAWN, Value Pawn and Jewelry, and other branded pawn operations. The Latin America Pawn segment consists of Empeño Fácil, Cash Apoyo Efectivo, and other branded pawn operations in Mexico, as well as GuatePrenda and MaxiEfectivo pawn operations in Guatemala, El Salvador, and Honduras. The company was founded in 1989 and is headquartered in Rollingwood, TX.
Predefined Scans Triggered: Elder Bar Turned Green, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
EZPW is up +1.27% in after hours trading. Today saw a nice bullish engulfing candlestick that implies we'll see an up day tomorrow. We have a solid rally that broke out above the February top. The RSI is overbought right now, but we've seen it hold those condition for quite a few trading days before things turn south. I think we could see a pause soon. The PMO is rising very strongly. It was one of the highest PMOs on requests today. Stochastics have turned up in positive territory and relative strength is definitely going its way. Even the group is outperforming. I've set the stop at support at 7.9% or $14.53.
The weekly chart shows us that price is going a bit parabolic right now and the weekly RSI is overbought, another reason to look for a pause. I think we can still get more upside here given the strongly rising weekly PMO. The StockCharts Technical Rank (SCTR) is in 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.
HCI Group, Inc. (HCI)
EARNINGS: 2025-05-08 (AMC)
HCI Group, Inc. engages in the business of property and casualty insurance, reinsurance, real estate, and information technology. It operates through the following segments: Insurance Operations, TypTap Group, Reciprocal Exchange Operations, Real Estate Operations, and Corporate and Others. The Insurance Operations segment includes the property and casualty insurance division and reinsurance division. The TypTap Group segment includes information technology operations, insurance management service operations, and its management company's activities. The Reciprocal Exchange segment represents the insurance operations of CORE and Tailrow, consolidated VIEs. The Real Estate Operations segment includes companies engaged in operating commercial properties the company owns for investment purposes or for use in its own operations. The Corporate and Other segment represents the activities of the holding companies and any other companies, such as CRM and TRM, that do not meet the quantitative and qualitative thresholds for a reportable segment. The company was founded by Paresh Patel, Gregory Politis, and Martin A. Traber on November 30, 2006 and is headquartered in Tampa, FL.
Predefined Scans Triggered: Parabolic SAR Sell Signals, P&F High Pole and Bullish Engulfing.
HCI is unchanged in after hours trading. I liked the breakout and pull back to the breakout point. We also have a bullish engulfing candlestick. I think you could also make a case for a bull flag here as well. The RSI is not yet overbought. The PMO is surging above the signal line. It had the highest PMO value of all the reader requests. Stochastics haven't quite turned up but they are still in positive territory. Relative strength looks very good for the group and for HCI which is outperforming both the group and the SPY by a mile. The stop is set between the 20/50-day EMAs at 7.8% or $136.68.
The weekly chart shows a nice breakout from resistance at the 2021 high. The weekly RSI is overbought, but given its past, it loves overbought territory. I don't like the negative divergence on the OBV with OBV tops declining and price tops ascending, but the SCTR is in the hot zone so I'll forgive it. Consider a 17% upside target to about $173.45.
Xcel Energy (XEL)
EARNINGS: 2025-05-01 (BMO)
Xcel Energy, Inc. is an electric and natural gas delivery company. It operates through the following three segments: Regulated Electric, Regulated Natural Gas Utility and All Others. The Regulated Electric segment focuses on generating, purchasing, transmitting, and distributing electricity. The Regulated Natural Gas Utility segment includes purchases, transport, stores, distribution, and sales. The All Others segment involves steam, appliance repair services, non-utility real estate activities, revenues associated with processing solid waste into refuse-derived fuel, investments in rental housing projects that qualify for low-income housing tax credits and equity method investments in energy impact partners funds. The company was founded in 1909 and is headquartered in Minneapolis, MN.
Predefined Scans Triggered: New 52-week Highs, Moved Above Upper Bollinger Band, Stocks in a New Uptrend (Aroon) and Moved Above Upper Price Channel.
XEL is down -0.46% in after hours trading. It looks like a double bottom, but it's not because it is coming at the top of a rising trend. Nonetheless, we do have a very nice breakout above resistance. The RSI is positive and not yet overbought despite the strong rally. The PMO is rising on a Crossover BUY Signal above the zero line. Stochastics are above 80. Relative strength is excellent for the group and the stock. The stop is set beneath support at 7.5% or $66.72.
The weekly chart shows a long-term trading range typical of most defensive stocks. However, this time around we saw a breakout. We also have a nice rising trend off support. The weekly RSI is positive and not overbought yet. The weekly PMO is on a new Crossover BUY Signal well above the zero line. Consider a 17% upside target to $84.40.
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 15% 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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