Considering this rally, we should not be having trouble finding stocks, but scans continue to come up mostly dry. I was thankful for Reader Request Day as I'm really struggling to find "Diamonds in the Rough". Apparently readers are struggling too. One reader decided to do a scan of high dividend payers and did come up with some interesting selections, but admittedly many were not up to snuff for various reasons. I did find two that look good to present, but they're not perfect.
One other reader sent in two excellent charts, but one of them was a Toronto stock and many of us can't invest in those issues so I opted not to include it. It is an Energy stock and while it looks very good right now, Crude is reversing. I'm not so sure it will continue to outperform.
Tomorrow is the Diamond Mine trading room! I'm looking forward to seeing the regulars but also hope that a few of you will venture in for the first time to see what it is about. We have a very friendly group!
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": SKIL, SWK and TROW.
Other requests: ADM, BEN, FRT, TGT and SES.TO.
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Carl has decided to retire, and Erin will be joining him in retirement. We will continue publication until June 27th, and we have already sent email on how your subscription will be affected. Please get in touch if you have any questions.
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Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (5/9/2025):
Topic: DecisionPoint Diamond Mine (5/9/2025) LIVE Trading Room
Recording & Download Link
Passcode: May##9th
REGISTRATION for 5/16/2025:
When: May 16, 2025 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine LIVE Trading Room
Register in advance for this webinar HERE
After registering, you will receive a confirmation email containing information about joining the webinar.
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.
Skillsoft Corp. (SKIL)
EARNINGS: 2025-06-09 (AMC)
Skillsoft Corp. engages in the provision of enterprise learning solutions. It operates through the Skillsoft Content and Global Knowledge segments. The Skillsoft Content segment is involved in the sale, marketing, and delivery of its content learning solutions, in areas such as Leadership and Business, Technology and Developer, and Compliance. It also includes technical skill areas assumed in the Codecademy acquisition. The Global Knowledge segment offers training solutions covering information technology and business skills for corporations and their employees. The company was founded on August 8, 1998 and is headquartered in Nashua, NH.
Predefined Scans Triggered: None.
SKIL is unchanged in after-hours trading. This one was a no-brainer to me given the textbook reverse head and shoulders pattern that was confirmed with today's breakout. This is a low volume stock so it could be subject to some manipulation, but I'd be willing to give it try as the price pattern is so tasty. The RSI is positive and not overbought. The PMO is rising above the zero line. Stochastics look good as they have just moved above 80. Relative strength is going its way right now. I chose the stop level to be as close to the 50-day EMA as possible at 7.8% or $21.37.
The weekly chart shows a rising trend out of the 2024 low with price looking like it wants to get back up to overhead resistance at the 2025 top. The weekly RSI just moved into positive territory. The weekly PMO is currently falling but it does appear to be decelerating somewhat due to this rally. The StockCharts Technical Rank (SCTR) is very bullish sitting at the top of the hot zone*.
*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.
Stanley Black & Decker Inc. (SWK)
EARNINGS: 2025-07-30 (BMO)
Stanley Black & Decker, Inc. engages in the provision of power and hand tools, and related accessories, products, services and equipment for oil and gas, infrastructure applications, commercial electronic security and monitoring systems, healthcare solutions, and mechanical access solutions. It operates through the Tools and Outdoor and Industrial segments. The Tools and Outdoor segment refers to power tools, hand tools, accessories and storage, and outdoor power equipment product lines. The Industrial segment includes the engineered fastening and infrastructure businesses. The company was founded by Frederick T. Stanley in 1843 and is headquartered in New Britain, CT.
Predefined Scans Triggered: Elder Bar Turned Blue.
SWK is unchanged in after-hours trading. This one has been in consolidation mode since its gap up rally on Monday. I'm not sure what the gap up was regarding, but it certainly suggested that we should see some follow-through here eventually. It could be setting up a reverse island bearish formation, but it hasn't gapped down yet and it doesn't look weak enough for that move to occur. The RSI is positive and not overbought. The PMO is rising strongly toward the zero line. Stochastics are holding above 80. Relative strength is a little weak for SWK near-term, but it is still showing a rising trend for now. Not the best "Diamond in the Rough" ever, but certainly it has merits. The stop is set as close to gap support as possible at 7.7% or $65.25.
Price is back within its prior trading range and does look like it wants to get back up to the top of range again. The weekly RSI is still negative, but rising. The weekly PMO has just turned back up. The SCTR needs help, but at least it is rising. There is plenty of upside potential here.
T. Rowe Price Associates, Inc. (TROW)
EARNINGS: 2025-08-01 (BMO)
T. Rowe Price Group, Inc. engages in the provision of investment management services. The company was founded by Thomas Rowe Price Jr. in 1937 and is headquartered in Baltimore, MD.
Predefined Scans Triggered: Elder Bar Turned Blue, P&F double Top Breakout, P&F Triple Top Breakout and P&F Quadruple Top Breakout.
TROW is down -1.01% in after-hours trading. I liked the shape of the rally on the breakout above resistance. We have another one that is vulnerable to a reverse island, but the rally looks solid. The RSI is positive and not overbought. The PMO is rising strongly above the zero line on a Crossover BUY Signal. Stochastics look extremely good above 80. Relative strength is rising across the board. The stop is set as close to support as possible at 7.9% or $89.93.
I really like this rally off strong support. It really appears ready to hit the top of the range. The weekly RSI is still negative but it is very close to positive territory. The weekly PMO has turned up. The SCTR is not in the hot zone, but I'll forgive that given the rally.
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 70% 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)
For more links, go to DecisionPoint.com