Financials may not have finished at the top of the leaderboard of sectors, but they were prominent in my Diamonds scans. Admittedly, this sector was not on my radar Friday. The second place finisher for "Sector to Watch" was Communication Services with Energy eventually winning. Comm Services (XLC) performed best today so I expected to see stocks in this sector in my scans. I really didn't see anything of interest.
Two of today's selections are from the Financial Asset Managers industry group. The other is a big name industrial, General Electric (GE). I had 98 charts to choose from after running my scans. I haven't had to review that many stocks/ETFs in some time. I don't like the market overall, but it appears this time there will be pockets of strength to take advantage of.
Good Luck & Good Trading,
Today's "Diamonds in the Rough": CIXX, GE and ORCC.
Runner-ups: ECPG, LADR, NVST, ATEX, CSGS and HOLI.
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RECORDING LINK (12/30/2022):
Topic: DecisionPoint Diamond Mine (12/30/2022) LIVE Trading Room
Start Time: Dec 30, 2022 09:00 AM PT
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Topic: DecisionPoint Diamond Mine 1/6/2023) LIVE Trading Room
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Here is the last recording (no recording on 12/26 or 1/2):
Welcome to DecisionPoint 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.
Stop levels are all rounded down.
CI Financial Corp. (CIXX)
EARNINGS: None Listed
CI Financial Corp. is an independent company offering global asset management and wealth management advisory services. It operates through the following business segments: Asset Management and Wealth Management. The Asset Management segment provides the majority of CI's income and derives its revenue principally from the fees earned on the management of investment funds and other fee-earning investment products. The wealth management segment derives its revenues principally from commissions and fees earned through the provision of ongoing services to clients and on the sale of mutual funds and other financial products. The company was founded in 1965 and is headquartered in Toronto, Canada.
Predefined Scans Triggered: New CCI Buy Signals and Entered Ichimoku Cloud.
CIXX is up a whopping +4.40% in after hours trading so we may be onto something here. The only thing I didn't like on the chart was the mild outperformance by the industry group. That goes for both of the Asset Managers I am presenting today. CIXX broke out of a bullish falling wedge last week and after a pullback to the breakout point, it rallied to show follow-through on the initial breakout. The RSI is positive and the PMO just triggered a crossover BUY signal. We have a STRONG OBV positive divergence that set up alongside the falling wedge pattern. Stochastics are rising strongly and CIXX is beginning to show new relative strength. The stop is set at 7.7% around $9.43.
The weekly chart looks mostly healthy. We don't like the negative weekly RSI, but it is rising. The weekly PMO is accelerating higher and the StockCharts Technical Rank (SCTR) is rising and at an okay reading of 58.4%. Upside potential is a little over 20% if it can continue to move through the layers of overhead resistance.
General Electric Co. (GE)
EARNINGS: 01/24/2023 (BMO)
General Electric Capital Corp. provides financial products and services. Its services include commercial loans and leases, fleet management, financial programs, credit cards, personal loans, and other financial services. The firm's solutions include energy finance and aviation finance. The company was founded in 1932 and is headquartered in Boston, MA.
Predefined Scans Triggered: P&F Double Top Breakout and P&F Bearish Signal Reversal.
GE is up +0.14% in after hours trading. I wish we had more upside potential on the daily chart given overhead resistance is quite close, but the bullish indicators suggest a breakout there. The RSI is positive and rising. The PMO is beginning to rise and should trigger a crossover BUY signal momentarily. The OBV is confirming this new rally, showing volume is coming in. Stochastics are above 80 and still rising. Relative strength for the group is very good and GE is a leader among the group based on its rising relative strength against the group. Hence it is outperforming the SPY. The stop is set at a comfortable 6.5% beneath the 200-day EMA around $79.45.
It is important that price breakout here. It is a strong level of overhead resistance given how many "touches" we have on the resistance line itself. The weekly RSI is positive and the weekly PMO is accelerating higher on an oversold BUY signal. The PMO is also above the zero line and not overbought. The SCTR is a strong 93.2% suggesting it in the top 5% of large-cap stocks regarding bullish trend and condition in all three timeframes. Upside potential if resistance is broken is over 23%.
Owl Rock Capital Corp. (ORCC)
EARNINGS: 02/22/2023 (AMC)
Owl Rock Capital Corp non traded business development company seeks investment opportunities in middle market companies located in the US with an EBITDA of $10 to $250 million and annual revenue of $50 million to $2.5 billion. The fund focuses on broad range of sectors including business services, healthcare services, pharma & healthcare technology, aerospace & defence, software & technology and manufacturing & industrials. it provides financing in the form of senior secured or unsecured loans, subordinated loans or mezzanine loans and a lesser extent, equity-related securities and warrants for growth, acquisitions, market or product expansion, re-financings and recapitalizations. Its investment size ranging from $20 to $250 million and it also acts as a lead investor.
Predefined Scans Triggered: Elder Bar Turned Green, Bullish MACD Crossovers and Parabolic SAR Buy Signals.
ORCC is up +0.67% in after hours trading. The RSI just moved into positive territory and today price closed above the 20/50-day EMAs. This forceful rally pushed the PMO upward where it is now lined up for an oversold crossover BUY signal. The OBV is rising with price, confirming the rally. Stochastics are rising a little tentatively, but they are now starting to accelerate higher toward positive territory. Relative strength is pretty good, certainly it is improving. The stop is set at 6.1% around $11.13.
The weekly chart is favorable. The weekly RSI is nearly in positive territory and rising. The weekly PMO has bottomed above its signal line which is especially bullish. The SCTR needs to improve; 47.4% isn't great, but it is rising. Upside potential is about 18%.
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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 am 12% exposed with a 2% hedge.
I'm required to disclose if I currently own a stock I mention and/or may buy/short it within the next 72 hours.
"Technical Analysis is a windsock, not a crystal ball." - Carl Swenlin
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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."
Regarding BUY/SELL Signals: The signal status reported herein is based upon mechanical trading model signals and crossovers. They define the implied bias of the price index/stock based upon moving average relationships and momentum, but they do not necessarily call for a specific action. They are information flags that should prompt chart review. Further, they do not call for continuous buying or selling during the life of the signal. For example, a BUY signal will probably (but not necessarily) return the best results if action is taken soon after the signal is generated. Additional opportunities for buying may be found as price zigzags higher, but the trader must look for optimum entry points. Conversely, exit points to preserve gains (or minimize losses) may be evident before the model mechanically closes the signal.
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