I'll be keeping it brief tonight and likely for the next week. Thank you to all of you that have sent kind emails of support. I'm learning all too well what "Sandwich Generation" means. I am blessed to live nearby to love them and help them as needed. Mom is likely going to have heart surgery sometime this week so my schedule is influx.
Good Luck & Good Trading!
Erin
Today's "Diamonds in the Rough": ACRS, BMBL, CANO, GOOGL and MRNA.
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Welcome to DecisionPoint Daily Diamonds, wherein I highlight ten "Diamonds in the Rough" per week. 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!
"Predefined Scans Triggered" are taken from StockCharts.com using the "Symbol Summary" option instead of a "SharpChart" on the workbench.
Aclaris Therapeutics, Inc. (ACRS)
EARNINGS: 8/3/2022 (BMO)
Aclaris Therapeutics, Inc. operates as a dermatologist-led biopharmaceutical company, which engages in identifying, developing, and commercializing novel drugs to address the needs in medical and aesthetic dermatology and immunology. It operates through the Therapeutics and Contract Research segments. The Therapeutics segment focuses on identifying, developing, and commercializing different therapies to address significant unmet needs in medical and aesthetic dermatology. The Contract Research segment provides laboratory services under contract research arrangements to pharmaceutical and biotech companies. The company was founded by Neal S. Walker, Frank Ruffo, Kamil Ali-Jackson, Christopher V. Powala, and Stuart D. Shanler in July 2012 and is headquartered in Wayne, PA.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Price Channel and Parabolic SAR Buy Signals.
ACRS is down -0.12% in after hours trading. A pullback wouldn't be a surprise here given today's big move. Price is also about to reach the top of the rising trend channel and resistance at early March top/mid-April high so be careful. The RSI is positive and the PMO just triggered a new crossover BUY signal. The 50-day EMA is on its way toward the 200-day EMA for a possible "golden cross". Stochastics are rising strongly and should hit 80 tomorrow. Relative strength of the group has been solid since the beginning of June. Performance by this stock is accelerating rapidly right now. The stop is set below the December top.
We have a large bullish double-bottom on the weekly chart. The pattern is a little wonky. The weekly RSI is positive and rising and the weekly PMO is on a BUY signal. The SCTR is excellent. I've listed a somewhat conservative upside potential given that the minimum upside target of the double-bottom is at the 2021 high.
Bumble Inc. (BMBL)
EARNINGS: 8/10/2022 (AMC)
Bumble, Inc. provides online dating services via two mobile applications: Bumble and Badoo. The firm segments its business geographically into North America and the Rest of the World. The company was founded by Whitney Wolfe Herd in 2014 and is headquartered in Austin, TX.
Predefined Scans Triggered: Moved Above Upper Bollinger Band and P&F Double Top Breakout.
BMBL is down -1.92% in after hours trading, paring back today's 2.54% gain. Price got above overhead resistance at the 200-day EMA. The RSI is positive and the PMO triggered a crossover BUY signal today. Stochastics moved above 80 and relative strength is excellent with the group just starting to outperform the SPY. The stop is rather deep but I believe you can thin it based on any entry you may make tomorrow or later.
Not much data on the weekly chart, but we do see the weekly RSI in positive territory and an earlier weekly PMO BUY signal. The OBV has steeply rising bottoms while bottoms on price are relatively flat. I'm calling it a positive divergence. The upside target is around $45, but the upside target of the double-bottom pattern doesn't arrive until 2021 tops are tested at $60.
Cano Health, Inc. (CANO)
EARNINGS: 8/9/2022 (BMO)
Cano Health, Inc. operates primary care centers and supports affiliated medical practices that engages in primary care for seniors in Florida, Texas, Nevada, and Puerto Rico. It provides population health management tools including telehealth, prescription home delivery, wellness programs, transition of care, and high-risk and complex care management. The company was founded by Marlow Hernandez in 2009 and is headquartered in Miami, FL.
Predefined Scans Triggered: Moved Above Upper Keltner Channel, Moved Above Upper Price Channel and P&F Double Top Breakout.
CANO is down -5.38% in after hours trading as it takes back the majority of today's gain. I was asked about this one as a "HOLD" so I'm examining it from that perspective. The chart is strong, it's price action that could pose a problem especially given tonight's pullback from overhead resistance. The chart is still favorable given the positive RSI and PMO BUY signal. We also have a positive OBV divergence. Relatively speaking this group has been a long-term favorite. CANO is now beginning to improve relative strength against the SPX and group. Depending on my profit, I would likely hold unless Stochastics turned down. We have an 8% stop level listed.
There is a bullish falling wedge on the weekly chart. The RSI is about to hit positive territory and the weekly PMO is accelerating higher. The SCTR is improving greatly. The upside target is set at the Q1 high.
Alphabet Inc. (GOOGL)
EARNINGS: 8/4/2022 (AMC)
Alphabet, Inc. is a holding company, which engages in the business of acquisition and operation of different companies. It operates through the Google and Other Bets segments. The Google segment includes its main Internet products such as ads, Android, Chrome, hardware, Google Cloud, Google Maps, Google Play, Search, and YouTube. The Other Bets segment consists of businesses such as Access, Calico, CapitalG, GV, Verily, Waymo, and X. The company was founded by Lawrence E. Page and Sergey Mikhaylovich Brin on October 2, 2015 and is headquartered in Mountain View, CA.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Price Channel, Parabolic SAR Buy Signals and P&F Double Top Breakout.
GOOGL is down -0.39% in after hours trading. I covered it on April 15th 2021. The position is closed, but it hit over 32% at the end of the bull market. Right now we have an almost textbook triple-bottom pattern. price has hit resistance which could imply a pullback tomorrow. The RSI is positive and rising. The PMO has bottomed above the signal line, something we didn't see the first two time there were price lows. Stochastics are nearly above 80. Relative strength has been mostly flat for the group, but it is improving. I don't like that it is underperforming its group somewhat. The stop is set halfway down the trading range of the triple bottom and below the 20-day EMA.
The weekly chart is improving, but isn't that great. The weekly RSI is rising, but is in negative territory. The PMO is turning up slowly, but the SCTR is slightly anemic at 60.6.
Moderna Inc. (MRNA)
EARNINGS: 8/3/2022 (BMO)
Moderna, Inc. engages in the development of transformative medicines based on messenger ribonucleic acid (mRNA). Its product pipeline includes the following modalities: prophylactic vaccines, cancer vaccines, intratumoral immuno-oncology, localized regenerative therapeutics, systemic secreted therapeutics, and systemic intracellular therapeutics. The company was founded by Noubar B. Afeyan, Robert S. Langer, Jr., Derrick J. Rose and Kenneth R. Chien in 2010 and is headquartered in Cambridge, MA.
Predefined Scans Triggered: Improving Chaikin Money Flow, Moved Above Upper Keltner Channel, Moved Above Upper Bollinger Band, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
MRNA is down -0.42% in after hours trading. I covered MRNA twice before and both positions are closed: September 9th 2021 and November 22nd 2021. Today's move makes it not as attractive for presentation, but the chart is good and a pullback could offer a nice opportunity for entering if it suits you. The RSI is overbought on today's giant advance. The PMO has been on a crossover BUY signal for weeks. Stochastics are above 80 and relative strength has been solid for the group in the longer term. MRNA is beginning to see outperformance. The stop is set at a deep 9.1%, but I doubt it will be that if price pulls back as I expect it to soon.
We have a bullish double-bottom developing. The weekly RSI just moved into positive territory and the weekly PMO is triggering a crossover BUY signal. The SCTR is bullish at 75.7.
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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)
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 45% exposed.
I'm required to disclose if I currently own a stock I mention and/or may buy/short it within the next 72 hours.
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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)
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