Today I ended up with two out of the three picks being in Consumer Discretionary. That was not my intention, I just let the charts speak for themselves. The Discretionary sector isn't in decline, it's just going nowhere. I found two stocks that certainly look to outperform the sector. They are already outperforming their industry groups and the SPY.
Still, show restraint right now as the market is incredibly weak. I do expect a sizable decline in the near future based on participation. Here is a link to my free article yesterday which discusses my concerns.
The third selection today is from the Software industry group. The group is holding its own right now against the SPY and this selection is outperforming them both currently.
Reader Request Day is Thursday so if you have any symbols on your mind, be sure to send them by Noon PT on Thursday.
Good Luck & Good Trading,
Today's "Diamonds in the Rough": CBRL, DOX and FLWS.
Runner-ups: ERJ, THRY, PRCT, WDAY, ASR, SAM and CSCO.
** JULY VACATION **
I will be in Europe 7/14 - 7/27 so there will not be any Diamonds reports or trading rooms during that time. All subscribers with active subscriptions on 7/27 will be compensated with two weeks added to their renewal date.
RECORDING LINK (5/12/2023):
Topic: DecisionPoint Diamond Mine (5/12/2023) LIVE Trading Room
REGISTRATION for 5/19/2023:
When: May 19, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (5/19/2023) LIVE Trading Room
Register in advance for this webinar HERE
After registering, you will receive a confirmation email containing information about joining the webinar.
Here is the last recording (5/15):
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.
Cracker Barrel Old Country Store, Inc. (CBRL)
EARNINGS: 06/07/2023 (BMO)
Cracker Barrel Old Country Store, Inc. engages in the operation and development of restaurant and retail outlets. The format of its stores consists of a trademarked rustic old country-store design that offers restaurant menu featuring home-style country food. The company was founded by Dan W. Evins on September 19, 1969 and is headquartered in Lebanon, TN.
Predefined Scans Triggered: Bearish Harami and P&F Low Pole.
CBRL is up +0.38% in after hours trading. This one has been in deep decline and is now forcefully rallying. This has formed a bullish "V" Bottom pattern. The expectation of the pattern once it retraces 1/3rd of the left side of the "V", you can then expect a breakout from resistance formed at the top of the left side of the "V". Other bullish characteristics are the positive RSI (in spite of a decline today), a PMO BUY Signal on tap and rising Stochastics in positive territory. Relative strength has reversed higher for CBRL and the industry group is outperforming the SPY. I've set the stop at about 6.1% or $99.57.
The weekly chart is somewhat favorable, but not enough that I would consider this an intermediate-term investment. The weekly RSI is positive. The weekly PMO is on a SELL Signal, but is decelerating on this week's rally. The SCTR is far from the "hot zone" above 70*, but is at least rising. I've set the upside target at about 14%, but I'd be happy with 13% which is more than double our stop level.
*If a stock is in the "hot zone" above 70, it implies that it is stronger than 70% of its universe (large-, mid-, small-caps and ETFs) primarily in the intermediate to long terms.
Amdocs Ltd. (DOX)
EARNINGS: 08/02/2023 (AMC)
Amdocs Ltd. is a holding company, which engages in the provision of software products and services for the communications, entertainment, and media industry service providers. The company was founded in 1988 and is headquartered in Saint Louis, MO.
Predefined Scans Triggered: New CCI Buy signals, Moved Above Upper Bollinger Band, Parabolic SAR buy Signals and Entered Ichimoku Cloud.
DOX is down -0.14% in after hours trading. It had what looks like a breakaway gap today that pushed price above the confirmation line of a bullish double-bottom pattern. The pattern suggests a minimum upside target right at overhead resistance. The RSI is positive and there is a brand new PMO BUY Signal. Stochastics are rising strongly in positive territory. The Software group is doing very well right now and DOX is really turning it on. The stop isn't overly deep at 6.8% or $87.41.
The weekly chart shows a double-top that is on its way to being busted with a breakout. The weekly RSI is positive and the SCTR is in the hot zone. The weekly PMO doesn't look great right now so this one should be considered more of a short-term trade than intermediate-term investment.
1-800 FLOWERS.COM, Inc. (FLWS)
EARNINGS: 09/07/2023 (BMO)
1-800-FLOWERS.COM, engages in the provision of gifts designing. It operates through the following business segments: Consumer Floral and Gifts, Gourmet Floral and Gifts, and BloomNet. The Consumer Floral and Gifts segment operates 1-800-Flowers.com, PersonalizationMall, FruitBouquets.com, Flowerama, and Alice's Table. The Gourmet Floral and Gifts segment manages Harry & David, Wolferman's Bakery, Vital Choice, Moose Munch, Stock Yards, Cheryl's, Mrs. Beasley's, The Popcorn Factory, DesignPac, 1-800-Baskets.com, Simply Chocolate, and Shari's Berries. The BloomNet segment consists of BloomNet and Napco. The company was founded by James F. McCann in 1976 and is headquartered in Jericho, NY.
Predefined Scans Triggered: None.
FLWS is down -0.41% in after hours trading. Today it formed a bullish engulfing candlestick. It is a large one as it engulfs the prior three trading days. The RSI just it positive territory and there is a new PMO BUY Signal. Stochastics are now above 80 and volume is coming in strongly. The group is performing mostly in line with the market, but FLWS is outperforming both the group and the SPY in a big way. The stop is a bit deep given today's rally was 4.62%. I've set it at 8.1% or $8.95.
This looks like the beginning of a bullish reverse head and shoulders. If price just reaches the confirmation line it will be an over 25% gain. The weekly RSI is just about in positive territory. The weekly PMO is flattening out just in time, but it is still likely to see a PMO SELL Signal before a whipsaw back into a BUY. The SCTR is in the hot zone.
Don't forget, on Thursdays I look at reader-requested symbols, click HERE to send me an email. 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)
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 18% long, 7% short.
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
(c) Copyright 2023 DecisionPoint.com
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.
Helpful DecisionPoint Links:
For more links, go to DecisionPoint.com