That's right! It's Reader Request Thursday where I take your suggested symbols and analyze them for "Diamond" potential. I had four interesting requests that I'll share and I found a "diamond in the rough" candidate straight from the Diamond Scan. Over the years I'm approached via email to look at specific symbols and give my advice. I've always had to demure, but now I welcome it since I have a blog devoted to stock analysis. So this is your chance! Send me symbols that are on your mind, on your watchlist, in your portfolio, or recommended by Joe across the street. I have to say when my friends ask me about stocks, my first statement is "let me pull up the chart". Well let's pull up some charts for my readers.
Welcome to DecisionPoint Daily Diamonds, wherein I highlight five "diamonds in the rough." 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!
READER REQUEST: Canopy Growth Corp (CGC) - Earnings: 2/14/2020
There has been a lot of hype regarding the medical marijuana industry. How many times have I seen "This Weed Stock will be the next Amazon!"? I have to say this is probably best set-up I've seen on a weed stock. Beautiful saucer shaped intermediate-term pattern. The PMO has turned down today, but given the nearly quarter percent drop today, not a surprise. The PMO is not overbought. I'm not thrilled with the OBV but really it's just confirming the short-term decline.
The weekly chart is very interesting. We have an oversold PMO BUY signal which looks promising. My only issue with this chart is that $25 is pretty stiff resistance given the 2018 'touches' as support. I'm adding this to my watch list. I want to see what it does at the $25 level.
Don't forget, on Thursdays I look at reader-requested symbols, so shoot me an email at firstname.lastname@example.org. I read every email I receive and try to answer them all!
Globe Life Inc (GL) - Earnings: 2/4/2020
This is my Diamond contribution today. It was a big rally today and that took price above overhead resistance. It closed above that resistance level which is bullish. The PMO has bottomed above the zero line and is nearing a BUY signal. We could have a flagpole from October to mid-December and a flag formed by the declining tops trend line. This breakout executes that pattern. Minimum upside target based on the pattern is a move to the $120 level! I can't say it will make that move, but let's check out the weekly chart.
The PMO has started to top with the formation of the "flag", but with this week's breakout, it has turned back up. It is moderately overbought, but there is plenty of room for it to move higher to support a continuation of the rally that began in 2019.
READER REQUEST: Coca Cola Co (KO) - Earnings: 1/30/2020 (reported today)
This one came in on one my scans yesterday but I opted not to present it for two reasons. First was that it was getting ready to report earnings and I try not to present stocks with that type of risk right out of the gate. Of course, it worked out if you owned it today, but you never really know. The PMO is on the overbought side as well. However, I still like KO and I certainly think it could move higher after a pullback to the breakout point. Typically stocks that report good earnings and see a bump like today's, will follow-through and rally higher.
Beware of a possible parabolic move. It would be good to see the current rising trend less steep. The PMO BUY signal is great albeit coming in overbought territory.
READER REQUEST: Sleep Number Corp (SNBR) - Earnings: 2/19/2020
Congratulations, dear reader on this one. The request came in before today's beautiful move. Right now price is trying to hold onto support at the $52 mark. I believe it will. The PMO is on a BUY signal and rising nicely and both the OBV and SCTR are confirming the rally.
I like the weekly chart here too. Weekly PMO bottoms are rising and it is likely to trigger a BUY signal tomorrow when the weekly chart goes final. My one concern would be the rather large rising wedge which is a bearish pattern. There is still plenty of time for this pattern to mature, but just keep it in mind.
READER REQUEST: iStar Inc (STAR) - Earnings: 2/27/2020
In the short term, this one looks like it is topping. There is a negative divergence on the OBV for the last few price tops and the PMO has begun to sink after a crossover SELL signal. All is certainly not lost though. The SCTR remains high and in the longer term, OBV bottoms have continued to rise with price.
Maybe this is why we are seeing what looks like a top on the daily chart. Price is up against resistance at the 2014 top. Given the PMO BUY signal and likely breakout above that 2014 top. There is potential.
Current Market Outlook:
Market Environment: It is important to consider the odds for success. The Silver Cross Index measures the percentage of stocks on IT Trend Model BUY signals (20-EMA > 50-EMA), while the Golden Cross Index measures the percentage of stocks on LT Trend Model BUY signals (50-EMA > 200-EMA). Don't forget that as a "Diamonds" member, you have access to our GCI/SCI curated ChartList on DecisionPoint.com. You'll find it under "Members Only" links on the left side on the Blogs and Links Page. Here are the current percentages on the Silver and Golden Cross Indexes:
- Diamond Scan Results: 7
- Diamond Dog Scan Results: 8
- Diamond Bull/Bear Ratio: 0.88
For a more comprehensive review of current market conditions as well as analysis of Dollar, Gold, Oil and Bonds, subscribe to the DecisionPoint Alert! For a LIMITED TIME you can get a coupon code that will give you a discount for bundling your Diamonds subscription with the DecisionPoint Alert! Contact email@example.com for more details.
Full Disclosure: I do not own any of the stocks above. I'm currently 35% in cash.
Erin Swenlin will be presenting at the The MoneyShow Las Vegas on May 11-13, 2020! You'll have an opportunity to meet Erin and discuss the latest DecisionPoint news and Diamond Scans. The conference is free to attend or view online!
Watch the latest episode of DecisionPoint with Carl & Erin Swenlin LIVE on Mondays 5:00p EST or on the StockCharts TV YouTube channel here!
Technical Analysis is a windsock, not a crystal ball.
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."
Helpful DecisionPoint Links:
DecisionPoint Shared ChartList and DecisionPoint Chart Gallery
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
For more links, go to DecisionPoint.com!