My scans produced some interesting results today. I was very interested in the Energy stocks in my results. Since they have been running higher, they haven't been in my scans (they're not showing "new" momentum). However, today I found another coal stock that might interest you and an oil equipment company.
Remember a few weeks ago I had made "Asset Managers" an industry group to watch. I found one for you and I believe there is one in the "short list" today. The last is a specialty chemicals company with a very strong chart.
Today's "Diamonds in the Rough" are: BTU, CDXS, EVR and VTOL.
"Short List" (no order): LPG, NESR, BK, SFNC, MET, PMT and SLB.
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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!
Peabody Energy Corp. (BTU)
EARNINGS: 11/8/2021 (BMO)
Peabody Energy Corp. engages in the business of coal mining. It operates through the following segments: Powder River Basin Mining, Midwestern U.S. Mining, Western U.S. Mining, Seaborne Metallurgical Mining, Seaborne Thermal Mining and Corporate and Other. The Powder River Basin Mining segment consists of its mines in Wyoming. The Midwestern U.S. Mining segment includes Illinois and Indiana mining operations. The Western U.S. Mining segment reflects the aggregation of its New Mexico, Arizona and Colorado mining operations. The Seaborne Metallurgical Mining segment covers mines in Queensland, Australia. The Seaborne Thermal Mining segment handles operations in New South Wales, Australia. The Corporate and Other segment includes selling and administrative expenses, results from equity affiliates, corporate hedging activities and trading and brokerage activities. The company was founded by Francis S. Peabody in 1883 and is headquartered in St. Louis, MO.
Predefined Scans Triggered: Filled Black Candles and P&F Double Top Breakout.
BTU is up +0.91% in after hours trading. I covered BTU on September 3rd 2020 and September 10th 2020 on a relook. The stop was hit so the position was closed at a -6.9% loss. It was hovering around $3 then... wish that stop had not hit!
I think BTU is a great way to get into coal if you haven't already. It's only recently begun to rally and we know that the other coal stocks we've presented have broken above their resistance levels at September highs. I believe this one will do the same. The RSI is positive and not overbought. The PMO has bottomed and is closing in on a crossover BUY signal. The Stochastics are very positive and not overbought. We saw quite a bit of accumulation on this gap up move. Relative strength looks great. The stop is deep, but it lines up with the gap... basically if price closes that gap, there could be continued follow-through to the downside.
The weekly chart is strong with a positive and not overbought weekly RSI. The weekly PMO is bottoming above the signal line. I see a very bullish cup and handle pattern that price is breaking out of this week. Upside potential is over 50%.
Codexis Inc. (CDXS)
EARNINGS: 11/4/2021 (AMC)
Codexis, Inc. is an enzyme engineering company, which engages in the development and sale of therapeutics. It operates through the Performance Enzymes and Novel Biotherapeutics segments. The Performance Enzymes segment commercializes CodeEvolver protein engineering technology platform and products in the pharmaceuticals market. The Novel Biotherapeutics segment targets new opportunities to discover and improve biotherapeutic drug candidates. Its products include screening kits and Codex HiFi Hot Start DNA Polymerase. The company was founded in January 2002 and is headquartered in Redwood City, CA.
Predefined Scans Triggered: None.
CDXS is up +1.16% in after hours trading. I covered CDXS as a reader request on August 26th 2021. The 5.5% stop was hit on the late September decline, but it was up almost 13% at the September top.
I like it again. The RSI is positive and we saw a ton of accumulation on the gap up which usually means follow-through. The PMO is rising toward a crossover BUY signal. Stochastics are just getting started. Relative strength is strong. The stop is deep but that is a function of today's more than 4% move. I've set it at the bottom of gap support and below the 50-EMA.
The weekly chart is favorable with a positive weekly RSI and a weekly PMO BUY signal. The PMO has flattened, but is bottoming above the signal line.
Evercore Partners Inc. (EVR)
EARNINGS: 10/27/2021 (BMO)
Evercore, Inc. operates as an independent investment banking advisory company. It operates through the Investment Banking and Investment Management business segments. The Investment Banking segment includes the global advisory business of the company through, which the firm deliver strategic corporate advisory, capital markets advisory, and institutional equities services. The Investment Management segment is comprised of wealth management and trust services through Evercore Wealth Management L.L.C. and investment management in Mexico through Evercore Casa de Bolsa, S.A. de C.V., as well as private equity through investments in entities that manage private equity funds. The company was founded by Roger C. Altman in 1995 and is headquartered in New York, NY.
Predefined Scans Triggered: Moved Above Upper Bollinger Band and P&F Double Top Breakout.
EVR is down -1.03% in after hours trading. Admittedly that makes it slightly less appetizing because today's breakout could be taken back tomorrow if it falls. However, if the indicators are correct, we should see a continuation of this breakout. The RSI is positive and not overbought. The PMO just triggered a crossover BUY signal. Stochastics are rising nicely and are not overbought. Relative strength is good. The stop is set below the trading range and EMAs.
EVR is trying very hard to execute a bullish flag formation. Yes we do have a breakout from the flag, but price is moving sideways. Still the positive weekly RSI and bottoming weekly PMO suggest it will get going soon.
Bristow Group Inc. (VTOL)
EARNINGS: 11/3/2021 (AMC)
Bristow Group, Inc. provides offshore oil and gas transportation, search and rescue and aircraft support services to government and civil organizations. The company's services include global SAR, helicopter sales, maintenance and modifications, training, oil & gas and unmanned aircraft system solutions. It is located global fleet supports operations in the North Sea, Nigeria and the U.S. Gulf of Mexico; as well as in the other offshore oil and gas producing regions of the world, including Australia, Brazil, Canada, Guyana and Trinidad. Bristow Group was founded in 1955 and is headquartered in Houston, TX.
Predefined Scans Triggered: Filled Black Candles.
VTOL is unchanged in after hours trading. The RSI is positive and not overbought. The PMO is headed toward a crossover BUY signal. We have a "V" type bottom. When you get 1/3rd retracement to the high, the pattern is executed and suggests price will breakout above the prior top. I would like to see more accumulation, but we at least have rising bottoms on the OBV. Stochastics are rising and not quite overbought. Relative strength is accelerating higher. The stop is lined up with the 50-EMA.
The weekly RSI is positive and not overbought and the weekly PMO looks fantastic on a BUY signal and rising out of oversold territory just above the zero line. Upside potential is at least 23%.
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 70% invested and 30% is in 'cash', meaning in money markets and readily available to trade with.
I'm required to disclose if I currently own a stock and if I may buy it within the next 72 hours.
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