Interesting day in the market with Apple (AAPL) leading major indices lower. I found it was a little tricky to weed out my scan results today. I decided that I would present a few stocks I like right now and few that I think could be winners, but need some time on the countertop to ripen. Since I'm presenting an Agriculture ETF, it was hard to not use the 'ripe' analogy. Utilities are on fire and have been for weeks. I know I've had a few of these as Diamonds. Today I have a conventional electricity stock that you might find alluring. As a reminder, be sure to set those stops! The market is acting 'toppy'. I continue to add the percentages on my charts to give you an idea of where you might want to consider a stop and then adjust to suit your own risk profile. ALSO, please note earnings dates. Many of them are coming in soon.
Invesco DB Agriculture Fund (DBA) - Earnings: N/A
This one is ripe. It was a good day for DBA. It managed to close above all of its EMAs today. It looks like it is setting up to close the gap off the bullish "V" bottom. The SCTR is quickly rising, the PMO is about ready to generate a BUY signal. The OBV is rising and is confirming the rally. One thing I like is that I can set a fairly tight stop on this one. I've marked the May low, but I might consider a stop between that low and the January low.
You might have noticed the reverse head and shoulders forming on the daily chart. It is very clear here. The weekly PMO has turned up in time to catch the execution of the pattern with a breakout above the neckline. Upside target is around $19 or $20.
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!
Discovery Inc (DISCA) - Earnings: 2/27/2020 (BMO)
This one is getting ripe. You could certainly enter now and a tight stop is available to you along the tops from Sept/Oct. The PMO is about to trigger a BUY signal. OBV bottoms are confirming the current rally and the SCTR is improving as well.
The weekly chart bothers me given the PMO SELL signal and I'm never a fan of price being in the middle of a trading range. I still think this has upside potential, but I believe it will need a babysitter.
Don't forget, on Thursdays I look at reader-requested symbols, so shoot me an email at email@example.com. I read every email I receive and try to answer them all!
Alliant Energy Corp (LNT) - Earnings: 2/20/2020 (AMC)
Probably one of my favorites today. Not only is it in a strong industry group and sector, it has a nice chart. The bull flag is nearly textbook. It has broken out as expected. The minimum upside target would be around $66 - 67. The PMO is overbought, but overbought conditions can persist in a bull market set-up. The OBV is confirming and the SCTR is reentering the 'hot zone' above 75. Be careful though, they report on Thursday.
The PMO is on a BUY signal and rising strongly. In the case of the weekly chart, the PMO is not overbought. Price is stretched out here, but given the positives on the charts, I'm okay with it.
NuVasive Inc (NUVA) - Earnings: 2/20/2020 (AMC)
Getting Ripe... This one had a nice pullback today. It didn't quite overcome the declining trend, but given the very nice positive divergence with the OBV, I'm looking for it to breakout. The PMO did flatten slightly on today's decline, but the OBV didn't make a new low. The SCTR is healthy. It reports on Thursday.
The weekly PMO is turning down and is somewhat overbought. It hasn't triggered a SELL signal yet and price really hasn't deteriorated that much. I'm expecting it to overcome resistance at the 2017 all-time high. There's opportunity to set a rather tight stop if you want to jump in now.
TJX Cos Inc (TJX) - Earnings: 2/26/2020 (BMO)
This one is ripe. I've annotated an 8% stop zone. The PMO looks great on its BUY signal, not overbought. The OBV set a new high along with price so volume is behind the move. The SCTR has been mid-range for awhile. I'd make sure it is going to hold $63, keep an eye on that.
The PMO whipsawed back into a BUY signal.
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: 12
- Diamond Dog Scan Results: 10
- Diamond Bull/Bear Ratio: 1.20
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Full Disclosure: I do not own any of the stocks above. I'm currently 20% 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!