Hello Diamond Readers!
All of today's stocks are from the Diamond PMO Scan. While I like today's stock picks, I don't think you want to increase your exposure right now. Granted there are some pockets of strength, but overall the market is shaky so tread carefully.
Thank you for allowing me to wait until today to write up some "Diamonds in the Rough" for you. It was difficult to get the DP Alert done in Las Vegas and trying to do this letter too... not good. I don't have any pictures from Las Vegas because you can't take pictures when you're at the tables in the casinos. I spent a lot of time there. The cards were not friendly the entire trip. My daughter who plays the slots also found the machines very stingy. Our goal in Vegas is to play as long as possible on as little as possible. Let's just say the market is far more friendly these days. At the end of this report you can see the view from the front of my tent in Zion. We are "glamping" so we do have actual beds and Wifi. I'll be taking plenty of photos over the next two days I'll share.
Today's "Diamonds in the Rough" are: CSL, FARM, GTES, ICHR and PCB.
** 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 hit Las Vegas and have arrived at Zion. Next up are 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 Wednesday (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!
Carlisle Cos, Inc. (CSL)
EARNINGS: 7/22/2021 (AMC)
Carlisle Cos., Inc. engages in the manufacture and distribution of engineered products for both original equipment and aftermarket channels. It operates through the following segments: Carlisle Construction Materials, Carlisle Interconnect Technologies, Carlisle Fluid Technologies, and Carlisle Brake & Friction. The Carlisle Construction Materials segment includes the manufacture of insulation materials, rubber, thermoplastic polyolefin, and polyvinyl chloride roofing membranes; related roofing accessories; and waterproofing products. The Carlisle Interconnect Technologies segment focuses on the design and manufacture of wire, cable, connectors, contacts and cable assemblies for the transfer of power and data. The Carlisle Fluid Technologies segment deals with industrial liquid and powder finishing equipment and integrated system solutions for spraying, pumping, mixing, metering and curing of a variety of coatings. The Carlisle Brake and Friction segment covers brakes and friction material and clutch and transmission friction material. The company was founded by Charles S. Moomy in 1917 and is headquartered in Scottsdale, AZ.
CSL was unchanged in after hours trading. Price broke out of a bullish falling wedge. The RSI is positive and the PMO is nearing a crossover BUY signal. I've annotated a red arrow on the OBV because it shows that we've had an influx of volume, but little price movement. Price should follow volume. So, yes, this isn't a perfect set-up, but the SCTR just entered the "hot zone" above 75 and relatively speaking, it is doing well.
I like the bullish flag formation on the weekly chart. The weekly RSI is positive. The weekly PMO is moving lower, but it has decelerated considerably. It's near all-time highs and I would expect it to continue setting new all-time highs based on that flag formation. Volume is a problem on the weekly chart as well given the negative divergence with the OBV.
Farmer Brothers Co. (FARM)
EARNINGS: 9/9/2021 (AMC)
Farmer Brothers Co. engages in the manufacture, wholesale, and distribution of coffee, tea, and culinary products. The company's products include roasted and liquid coffee; flavored and unflavored teas; coffee related products such as coffee filters, sugar and creamers; culinary products like spices, pancake and biscuit mixes, gravy and sauce mixes, soup bases, dressings, syrups and sauces; and other beverages including cappuccino, cocoa, granitas, and concentrated and ready-to-drink cold brew and iced coffee. The company was founded by Roy E. Farmer in 1912 and is headquartered in Northlake, TX.
FARM was up +$0.43 today and it is was down -$0.43 in after hours trading. Even if price retraces back to yesterday's close or below, it will still be safely above support where I've set the stop. The RSI is positive and the PMO is going in for a crossover BUY signal. Volume poured in last week. I wasn't able to determine exactly why it happened in the news, but in any case it shows there is some excitement related to this stock. The biggest issue I have is that the industry group is underperforming. Fortunately for FARM it is beginning to outperform both its group and the SPX.
The weekly RSI is positive and not overbought and the weekly PMO is rising but overbought. I don't see serious overhead resistance until the late 2019 top, so there is some nice upside potential if that industry group can begin to kick it into gear.
Gates Industrial Corp. plc (GTES)
EARNINGS: 8/10/2021 (BMO)
Gates Industrial Corp. Plc is a holding company, which engages in the manufacture of engineered power transmission and fluid solutions. It operates through the following segments: Power Transmission and Fluid Power. The Power Transmission segment includes elastomer drive belts, and related components used to efficiently transfer motion in a broad range of applications. The Fluid Power segment comprises of hoses, tubing, and fittings designed to convey hydraulic fluid at high-pressures in both mobile and stationary applications, and high-pressure and fluid transfer hoses used to convey various fluids. The company was founded on September 25, 2017 and is headquartered in Denver, CO.
GTES was unchanged in after hours trading. I like this chart, but I would really like to see it get above overhead resistance at those prior tops. It is set up to do so. The RSI is positive and rising. The PMO is rising out of oversold territory above the zero line. The group is performing in line with the SPX, but GTES has been a strong performer within the group whether it is outperforming or not. It's now begun to outperform the SPX. I have a stop set right below support.
I've only marked 14% as an upside target, but I expect it to move past that. The weekly PMO isn't on board with this, but the RSI is positive and volume is coming in.
Ichor Holdings, Ltd. (ICHR)
EARNINGS: 8/3/2021 (AMC)
Ichor Holdings Ltd. engages in designing, engineering, and manufacturing fluid delivery subsystems for semiconductor capital equipment. It offers gas and chemical delivery systems, which are key elements of the process tools used in the manufacturing of semiconductor devices. The firm also manufactures precision machined components, weldments, and proprietary products for use in fluid delivery systems for direct sales to its customers. The company was founded in 1999 and is headquartered in Fremont, CA.
ICHR was unchanged in after hours trading. It is currently forming a bullish double-bottom pattern. The RSI is positive and the PMO just reached positive territory and is on its way toward a crossover BUY signal. Price is holding above the major moving averages and today the 5-EMA crossed above the 20-EMA. The SCTR has been healthy for some time. The group is doing well and ICHR is beginning to outperform both the group and SPX.
There is what appears to be a giant bull flag. It will require a breakout from the current declining trend. The weekly RSI is positive. The weekly PMO is on a SELL signal and not looking to healthy so consider this short-term until it gets at least a 3% breakout from this bullish flag pattern.
PCB Bancorp (PCB)
EARNINGS: 7/22/2021 (AMC)
PCB Bancorp operates as the bank holding company for Pacific City Bank that provides various banking products and services to individuals, and small and middle market businesses in Southern California. The firm offers demand, savings, money market, and time deposits, as well as certificates of deposit; and remote deposit capture, courier deposit services, positive pay services, zero balance accounts, and sweep accounts. It also provides real estate loans, commercial and industrial loans, automobile secured loans, unsecured lines of credit, term loans, and personal loans for various business customers, including manufacturing, wholesale and retail trade, hospitality, etc. In addition, the company offers automated teller machines, debit cards, direct deposits, and cashier's checks, as well as treasury management, wire transfer, and automated clearing house services, cash management services, and online, mobile, telephone, mail, and personal appointment banking services. The company was founded on July 9, 2007 and is headquartered in Los Angeles, CA.
PCB was unchanged in after hours trading. I noticed three Banks came through the Diamond PMO Scan and I liked this one best. I'm still suspect of the group, but it is slowly beginning to outperform. Price broke out from a bullish falling wedge; it is just stuck below overhead resistance right now at the March high. There was a huge influx of volume on strong earnings estimates moving forward. The RSI is positive and the PMO is nearing a crossover BUY signal. The 5-EMA just crossed above the 20-EMA for a ST Trend Model BUY signal. The SCTR just entered the "hot zone" above 75. This is a solid out-performer within the industry group and it is beginning to outperform the SPX. You can set a stop just above 7%.
The weekly chart has some merit given the positive RSI, but that weekly PMO could become a problem. If it can break above $17, it has good upside potential.
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:
Full Disclosure: I'm about 50% invested and 50% is in 'cash', meaning in money markets and readily available to trade with.
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."
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