I had three Reader Requests come in and I decided to use all three. The charts were constructive and hit all the points that I look for in a "Diamond in the Rough".
Two of the stocks are what I like to call "Boom or Bust" stocks. They carry higher risk as they can really bust, but they also have an opportunity to boom very high. Just know that these two will test your risk appetite. If you do jump in, always position size wisely.
Hope your holidays are continuing to be bright and joyful! I will see you tomorrow in the Diamond Mine trading room. I expect turn out will be low. Just remember that you can download these videos for future viewing before they disappear off the server in two weeks time.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": NIO, TDOC and UNIT.
RECORDING & DOWNLOAD LINK (12/22/2023):
Topic: DecisionPoint Diamond Mine (12/22/2023) LIVE Trading Room
Passcode: December#22
REGISTRATION for 12/29/2023:
When: Dec 29, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (12/29/2023) LIVE Trading Room
Register in advance for this webinar LINK
After registering, you will receive a confirmation email containing information about joining the webinar.
Here is the last recording from 12/18 (no recording on 12/25 or 1/1):
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.
NIO Inc. (NIO)
EARNINGS: 02/29/2024 (BMO)
NIO, Inc. is a holding company which engages in the design, manufacture, and sale of electric vehicles. Its products include the EP9 supercar and ES8 7-seater SUV. It provides users with home charging, power express valet services, and other power solutions including access to public charging, access to power mobile charging trucks, and battery swapping. It also offers other value-added services such as service package, battery payment arrangement, and vehicle financing and license plate registration. The company was founded by Bin Li and Li Hong Qin on November 28, 2014 and is headquartered in Jiading, China.
Predefined Scans Triggered: Moved Above Upper Keltner Channel, Moved Above Upper Bollinger Band and P&F Low Pole.
NIO is up +0.32% in after hours trading. Here is "Boom or Bust" stock number one. Price has broken away from a trading range. It is arriving at overhead resistance at the 200-day EMA, but the indicators are configured positively enough to look for an upside breakout. The RSI is positive and the PMO is rising above the zero line and accelerating. Stochastics are rising above 80. Relative strength studies are bullish as all relative strength lines are rising. The stop is set at the deepest level I generally go at 8% or $8.67. It was too far to drop it beneath support.
The weekly chart tells me this could possibly be considered an intermediate-term investment rather than a short-term trade. We have a bullish double-bottom that has formed. The weekly RSI is now above net neutral (50). The weekly PMO is nearing a Crossover BUY Signal. The StockCharts Technical Rank (SCTR) is not yet in the hot zone* above 70, but it is rising vertically. This one could boom over 90% if the double bottom pattern is correct.
*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.
Teladoc Health, Inc. (TDOC)
EARNINGS: 02/21/2024 (AMC)
Teladoc Health, Inc. engages in the provision of telehealthcare services using a technology platform via mobile devices, the Internet, video and phone. It operates through the following segments: Teladoc Health Integrated Care, BetterHelp, and Others. The Teladoc Health Integrated Care segment offers virtual medical services. The BetterHelp segment includes virtual mental health and other wellness services. The company was founded in June 2002, by George Byron Brooks, Michael Gorton, and Gary Wald and is headquartered in Purchase, NY.
Predefined Scans Triggered: P&F Double Top Breakout.
TDOC is unchanged in after hours trading. Here is "Boom or Bust" stock number two. It is up against rather strong resistance and the PMO is overbought. However, other than that I like the chart. The RSI tells us that price is nearing overbought conditions but isn't there yet. The PMO is overbought, but continues to rise strongly suggesting there is price strength. Stochastics are well above 80 and are technically still rising. Relative strength for the Software group is beginning to improve. TDOC is showing increasing relative strength against the group and the SPY. The stop is set near the 20-day EMA at 7.8% or $20.37.
We see a tiny breakout in price this week on the weekly chart. The weekly RSI is now in positive territory and there is a rather new weekly PMO Crossover BUY Signal. Unfortunately the SCTR is not in the hot zone, but it is rising. It could boom over 55%.
Uniti Group Inc. (UNIT)
EARNINGS: 02/22/2024 (BMO)
Uniti Group, Inc. is a real estate investment trust company, which is engaged in the acquisition and construction of mission infrastructure in the communications industry. It operates through the following business segments: Leasing, Fiber Infrastructure, Towers, Consumer CLEC, and Corporate. The Leasing segment represents the real estate investment trust operations of the company and includes the results from leasing business, Uniti leasing, which engages in the acquisition of mission-critical communications assets and leasing them to anchor customers on either and exclusive or shared-tenant basis. The Fiber Infrastructure segment refers to the operations of the fiber business of the company, Uniti Fiber, which provides infrastructure solutions, including cell site backhaul and dark fiber, to the telecommunications industry. The Towers segment encompasses Uniti Towers, which acquires and construct tower-related real estate in the United States and Latin America. The Consumer CLEC segment is the operations of Talk America, which provides local telephone, high-speed internet and long distance services to customers in the eastern and central United States. The Corporate segment consists of corporate and back office functions of the company. The company was founded in February 2014 and is headquartered in Little Rock, AR.
Predefined Scans Triggered: None.
UNIT is up +0.85% in after hours trading. Price has recently broken out above resistance. The RSI is positive and not yet overbought. There is a nearing PMO Crossover BUY Signal. When we see a bottoming PMO and Crossover BUY Signal above the zero line, it is especially bullish. I like how Stochastics are rising strongly and relative strength studies are very bullish. This is a low-priced stock so position size wisely. I've set the stop near the 20-day EMA at 7.1% or $5.48.
The weekly chart is very bullish and suggests to me that this could be an intermediate-term investment. The weekly RSI is positive and not at all overbought. The weekly PMO is rising and is not yet overbought. The SCTR is at the top of the hot zone. I believe it could move even higher than 37.1% given the reverse head and shoulders pattern that was confirmed on this recent breakout.
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 85% long, 0% 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
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Watch the latest episode of DecisionPoint Trading Room with Carl & Erin Swenlin on Mondays 3:00p 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."
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:
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
For more links, go to DecisionPoint.com