In today's bonus Diamond Mine this week we noticed that Consumer Discretionary was beginning to breakout and show strength so it wasn't surprising to see them peppering my scan results today. I have included three that are showing new strength within that sector.
The Diamond PMO Scan produced nine results which is better than the zeros of the last two days, but this scan usually produces 25 - 30 or more. It gets thin results when the market is toppy.
Today's "Diamonds in the Rough" are: AZO, FND and WING.
Stocks/ETFs to Review (no order): HD, LOW, POOL, EVRI, AXNX, FOXF, CMTL, CTAS, CIBR and PD.
** UPCOMING VACATION - June 28th to July 9th **
It's that time of year again! Last year it was a road trip to Alabama and back, this year it is a road trip to Utah and back! We plan on dropping in Las Vegas, Zion, Spanish Fork, Bryce Canyon, back to the Grand Canyon, Bull Head City and finally back home. I'll include my travel diary and pictures just like last year for Diamonds readers!
I plan on writing, but trading rooms will be postponed until I return home. Diamond Report publishing will vary depending on travel and activities, but you WILL get your 10 "Diamonds in the Rough" per week.
TENTATIVE SCHEDULE NEXT WEEK:
Five stocks on Wednesday (6/30), five stocks on Thursday (7/1) and then a Recap on Friday (7/2).
Diamond Mine Information:
RECORDING LINK Today (6/23):
Topic: BONUS DecisionPoint Diamond Mine Wednesday (6/23)
Start Time : Jun 23, 2021 09:01 AM
6/23 Diamond Mine Recording Link.
Access Passcode: June-23rd
RECORDING LINK (Friday 6/18):
Topic: DecisionPoint Diamond Mine (06/18/2021) LIVE Trading Room
Start Time : Jun 18, 2021 08:59 AM
6/18 Diamond Mine Recording Link.
Access Passcode: June-18th
REGISTRATION FOR FRIDAY Diamond Mine:
When: Jun 25, 2021 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (6/25) LIVE Trading Room
Register in advance for FRIDAY's webinar HERE
Save the registration confirmation email with login instructions in case Zoom doesn't notify you in time.
Free DP Trading Room RECORDING LINK:
Topic: DecisionPoint Trading Room
Start Time : Jun 14, 2021 09:00 AM
Free DP Trading Room Recording LINK.
Access Passcode: June/14th
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!
Autozone Inc. Nevada (AZO)
EARNINGS: 9/21/2021 (BMO)
AutoZone, Inc. engages in the retail and distribution of automotive replacement parts and accessories. The firm offers ALLDATA, which produces, sells and maintains diagnostic and repair information software used in the automotive repair industry and E-commerce, which includes direct sales to customers. The company was founded by Joseph R. Hyde, III on July 4, 1979 and is headquartered in Memphis, TN.
AZO is unchanged in after hours trading. I presented O'Reilly Automotive (ORLY) on Monday. AZO is in the same industry group and is a competitor to ORLY so we're staying in the same auto parts family here. This is also a strong chart. We have a bullish rounded bottom pattern. The RSI has just moved positive and the PMO triggered a crossover BUY signal. Additionally, there was a ST Trend Model BUY signal today as the 5-EMA crossed above the 20-EMA. SCTR is improving and volume is beginning to come in on the rally. The group is beginning to outperform and AZO is doing well against both the group and the SPX. The stop is only 6%, but if it drops below 1410, beware.
Price bounced off the 17-week EMA and is headed back to its all-time highs. The weekly RSI is positive and the weekly PMO is beginning to decelerate.
Floor & Decor Holdings, Inc. (FND)
EARNINGS: 8/5/2021 (AMC)
Floor & Decor Holdings, Inc. engages in the retail of hard surface flooring and related accessories. It provides wood, stone, and flooring products. Its products include vinyl, laminate, and tiles with materials installation for living rooms, kitchen, bathrooms, and walls. The company was founded by George Vincent West in 2000 and is headquartered in Atlanta, GA.
FND is unchanged in after hours trading. It appears the Home Improvement industry group is waking up. FND came up on my scans, but looking at big boys Home Depot (HD) and Lowes (LOW) charts, they're beginning to turn around as well. The RSI is now in positive territory. Price broke out of a bullish falling wedge today and triggered a PMO crossover BUY signal. The ST Trend Model is nearing a BUY signal given the 5-EMA is about to cross above the 20-EMA. The group is performing well against the SPX and so is FND. It isn't outperforming its group, but it is doing very well against the SPX.
The weekly PMO is not good, but we may see some deceleration soon. Price has hit an intermediate-term rising trend and appears to be bouncing off it. If this rising trend is lost, don't stick around.
Wingstop Inc. (WING)
EARNINGS: 7/28/2021 (BMO)
Wingstop, Inc. is a franchisor and operator of restaurants, which engages in the provision of cooked-to-order, hand-sauced, and tossed chicken wings. It operates through Franchise and Company segments. The Franchise segment consists of domestic and international franchise restaurants. The Company segment comprises company-owned restaurants. The company was founded in 1994 and is headquartered in Dallas, TX.
WING is unchanged in after hours trading. There are many choices within this industry group, but I like the set up on this chart. As you can see the group is beginning to outperform the SPX and WING is a strong performer within the group. WING closed near its high for the day, so there may be a better entry tomorrow on a pullback from this breakout from the recent highs at $152. The RSI is positive and not yet overbought. The PMO has bottomed above its signal line which is especially bullish. OBV bottoms are rising to confirm the rising trend and the SCTR is improving. The stop is set just below support at $144.
We finally have a weekly PMO that is rising! It isn't overbought either. The weekly RSI is positive and rising. There is overhead resistance ahead, but given the weekly PMO rising and nearing a crossover BUY signal, I believe it should be able to push through it.
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!
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 50% invested and 50% is in 'cash', meaning in money markets and readily available to trade with. Mostly shuffling my portfolio by adjusting my exposure in certain sectors.
Technical Analysis is a windsock, not a crystal ball.
Watch the latest episode of DecisionPoint with Carl & Erin Swenlin on Mondays 7:00p EST or on the DecisionPoint playlist on the StockCharts TV YouTube channel here!
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