Last Thursday I looked at a few Energy ETFs that looked promising going into this week. Both are up about 2.5% and 4.5% since we picked them last Thursday. This sector is turning around and it should continue to move higher.
Take a look at the Energy Sector (XLE) chart from our Sector ChartList on our website. You'll find the link to this ChartList on the left-hand side of our Blogs and Links pages. I love our sector charts because we offer the opportunity to 'look under the hood' at numerous indicators to evaluate participation as well as momentum.
The best part of XLE right now is that oversold BUY signal that just arrived today. Also participation is soaring right now as 100% of the XLE sector stocks have their price above their 20-EMA. The Silver Cross Index (SCI) is rising and tells us that 87% of stocks have their 20-EMA above their 50-EMA. Typically when price gets above the 50-EMA, it is sign that the stock is ready to rally. Well, as of today, 97% have moved above their 50-EMA.
Convinced yet? Be sure to take a look at Thursday's Diamonds Report and you can see the Exploration ETF (IEO) and Equipment ETF (XES) have rallied.
Additionally, you'll notice these stocks have exceptional yields, 8.56%, 7.11% and 5.02%! That packs a punch!
Today's "Diamonds in the Rough" are: OKE, MMP and VLO.
Stocks/ETFs to Consider (no order): WMB, CNQ, EQT, ENB, KMI, RRC and SUN.
Diamond Mine REGISTRATION Information:
When: May 7, 2021 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (5/7/2021) LIVE Trading Room
Register in advance for this webinar HERE.
After registering, you will receive a confirmation email containing information about joining the webinar, including the password. SAVE IT! Zoom doesn't always send out the reminders.
Diamond Mine RECORDING Link:
Topic: DecisionPoint Diamond Mine (04/30/2021) LIVE Trading Room
Start Time : Apr 30, 2021 09:00 AM
Meeting Recording Link.
Access Passcode: April/30
***Click here to register for this recurring free DecisionPoint Trading Room on Mondays at Noon ET!***
Free DP Trading Room RECORDING LINK:
Topic: DecisionPoint Trading Room with GREG SCHNELL, CMT
Start Time : May 3, 2021 09:00 AM
Meeting Recording for DP Trading Room.
Access Passcode: DP/May/03
For best results, copy and paste the access code to avoid typos.
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!
Magellan Midstream Partners, LP (MMP)
EARNINGS: 7/29/2021 (BMO)
Magellan Midstream Partners LP engages in the transportation, storage and distribution of petroleum products. It operates through the following segments: Refined Products, Crude Oil, and Marine Storage. The Refined Products segment consists of common carrier refined products pipeline system, independent terminals, and its ammonia pipeline system. The Crude Oil segment comprises of crude oil pipelines, splitter and storage facilities which are used for contract storage. The Marine Storage segment includes marine terminals located along coastal waterways. The company was founded in August 2000 and is headquartered in Tulsa, OK.
MMP is unchanged in after hours trading. This one has been a winner since late March. As Mary Ellen McGonagle often says, "Winners keep on winning". The RSI is positive and not yet overbought. The PMO is on an oversold BUY signal and is rising gently, leaving it plenty of room to rise before getting overbought. The OBV is confirming this recent breakout by breaking out itself. The SCTR is continuing to improve and performance is excellent against the SPX and its industry group which also began to outperform at the end of March. This is clearly a strong performer in this industry group. The stop level is manageable at about 8% or $44.
The weekly chart is very bullish. First we have a positive RSI and PMO rising on an oversold BUY signal.Notice that last week it was able to close the early 2020 bear market gap down. There is also a bullish ascending triangle that was executed on that breakout. I am looking for an upside target around the 2017 high.
Oneok, Inc. (OKE)
EARNINGS: 7/27/2021 (AMC)
ONEOK, Inc. engages in gathering, processing, fractionating, transporting, storing and marketing of natural gas. It operates through the following segments: Natural Gas Gathering and Processing, Natural Gas Liquids and Natural Gas Pipelines. The Natural Gas Gathering and Processing segment offers midstream services to producers in North Dakota, Montana, Wyoming, Kansas and Oklahoma. The Natural Gas Liquids segment owns and operates facilities that gather, fractionate, treat and distribute NGLs and store NGL products, in Oklahoma, Kansas, Texas, New Mexico and the Rocky Mountain region, which includes the Williston, Powder River and DJ Basins, where it provides midstream services to producers of NGLs and deliver those products to the two market centers, one in the Mid-Continent in Conway, Kansas and the other in the Gulf Coast in Mont Belvieu, Texas. The Natural Gas Pipelines segment provides transportation and storage services to end users. The company was founded in 1906 and is headquartered in Tulsa, OK.
OKE is up +0.59% in after hours trading. I covered OKE twice before in Diamonds, February 10th 2021 and March 4th 2021 (a reader request). The stop was never hit on either so it is up +17.5% since 2/10/21 and up +9.0% since 3/4/21.
Notice in the description of this company it is heavily leveraged in the Natural Gas industry. Given Natural Gas (UNG) is on a beautiful breakout rally, OKE should continue to benefit. This one is digesting the last breakout and offers us a nice entry near support. The RSI is positive and the PMO is about to trigger a crossover BUY signal. The OBV is confirming the rising trend and the SCTR is top notch at 91.3. Performance speaks for itself here.
The weekly PMO may look like it is turning over, remember when a stock has consistent acceleration within a rising trend, the PMO will flatten out. Notice that OKE also just closed the gap from early 2020. Additionally this rally executed a bullish double-bottom pattern. Upside potential is 30%.
Valero Energy Corp (VLO)
EARNINGS: 7/22/2021 (BMO)
Valero Energy Corp. engages in the manufacture and marketing of transportation fuels and other petrochemical products. It operates through the following business segments: Refining, Ethanol and Renewable Diesel. The Refining segment comprises of refining operations, associated marketing activities, and logistics assets that support its refining operations. The Ethanol segment includes its ethanol operations, associated marketing activities, and logistics assets that support its ethanol operations. The Renewable Diesel covers the operations of Diamond Green Diesel Holdings LLC. The company was founded in 1980 and is headquartered in San Antonio, TX.
VLO is up +1.33% in after hours trading. This chart is very bullish. Not only do we have a bullish double-bottom, price has crossed above its confirmation line. The minimum upside target would be right around the March top. The RSI is positive and not overbought. The PMO is on a new oversold crossover BUY signal. The OBV is confirming the rally with rising bottoms. The SCTR is excellent at 93.5. It is a clear outperformer. The stop is set at the 50-EMA or $71.74.
The weekly PMO was beginning to turn over but this week has bottomed and is headed higher. We see a very large double-bottom. It broke above the confirmation line and then pulled back to it. In the process it formed a bull flag with a bullish falling wedge as its flag. This week it has broken out of the flag. The minimum upside targets of the flag and large double-bottom suggest price should easily reach the 2018 top.
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!
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)
- The Bullish Percent Index (BPI) shows the percentage of SPX stocks on Point & Figure BUY signals.
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 is the current chart:
The Diamond Index chart looks at the number of scan results from my bullish Diamond PMO Scan and the number of scan results from the inverse Diamond Dog Scan. The Diamond Ratio divides the bullish results by the bearish results.
I only have data going back to October 2019 so I won't make any sweeping conclusions about the Diamond Index chart. I have marked cardinal tops with red dotted vertical lines and cardinal price bottoms with green dotted vertical lines. I believe that when the Diamond Dog results spike, it usually comes at a price bottom, or marks a strong continuation of the rising trend.
Unfortunately, the Diamond PMO Scan result numbers aren't providing much insight. The Diamond Ratio has promise, but again I don't see a clear correlation to the market tops/bottoms right now. I need to study and manipulate the data some more. Keep you posted!
Full Disclosure: I'm about 65% invested and 35% is in 'cash', meaning in money markets and readily available to trade with. Hoping to pick up one of these three tomorrow off the 5-minute candlestick chart.
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:
For more links, go to DecisionPoint.com!