I was surprised today that requests came in so light, but of the ones provided, I was able to pull three choices for you. I think all three have merit.
One I would classify as a "Boom or Bust" type of stock. Two had very strong rallies today and could experience some pullback before they continue to rally, this would offer you the best buy point. One is interestingly a Bank stock. I haven't seen those come through on the scans of late, but this chart deserved some attention on a breakout.
Tomorrow is the Diamond Mine trading room! I look forward to speaking with you all. A reminder that you can download the recordings to view at your leisure. We look at the market to start, find a sector and industry group to watch, go over Diamonds in the Rough, take symbol requests and finally we run a scan live and 'mine' for new stocks that look good going into the following week. Join us! The chat room is filled with friends to kick the tires with.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": CABA, CLSK and NU.
Other requests: KOLD, ARM, MAXI, AVDX, APG, LRCX, SBLK and IDXX.
RECORDING & DOWNLOAD LINK (2/2/2024):
Topic: DecisionPoint Diamond Mine (2/2/2024) LIVE Trading Room
Recording & Download Link HERE.
Passcode: February#2
REGISTRATION for 2/9/2024:
When: Feb 9, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (2/9/2024) 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 latest recording from February 5th. Click HERE to subscribe to the DecisionPoint YouTube Channel to be notified when new content is available.
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.
Cabaletta Bio Inc. (CABA)
EARNINGS: 03/14/2024 (BMO)
Cabaletta Bio, Inc. operates as a clinical-stage biotechnology company, which engages in the discovery and development of engineered T cell therapies for B cell-mediated autoimmune diseases. Its proprietary technology utilizes chimeric autoantibody receptor to selectively bind and eliminate B cells that produce disease-causing autoantibodies. The company was founded by Michael C. Milone, Steven Nichtberger, and Aimee Payne in April 2017 and is headquartered in Philadelphia, PA.
Predefined Scans Triggered: New 52-week Highs, Moved Above Upper Bollinger Band, Stocks in a New Uptrend (Aroon), Moved Above Upper Price Channel and P&F Double Top Breakout.
CABA is down -0.47% in after hours trading so some of today's big gain may be shaved off tomorrow. That would offer a good entry, although it doesn't look too bad right now. I like today's big breakout move for sure. Add the positive RSI and new PMO Crossover BUY Signal and you have a recipe for follow through. Stochastics have also moved above 80. The Biotech group isn't performing that well against the SPY, but this stock is certainly an outperformer. The stop is set as deeply as I will go. If you get in on a pullback it will be thinner at that level of 8% or $23.34.
The weekly chart is positive. This breakout is to new all-time highs. The weekly RSI is positive, although getting overbought. It has seen far more overbought readings that this however so I believe it has more upside to go. The weekly PMO is nearing a Crossover BUY Signal and the StockCharts Technical Rank (SCTR) is near the top of the hot zone* above 70. This has intermediate-term possibilities. Consider a 17% upside target to $29.69. It could go much further.
*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.
CleanSpark, Inc. (CLSK)
EARNINGS: 02/08/2024 (AMC) ** Reported Today **
CleanSpark, Inc. is a bitcoin mining technology company, which engages in the management of data centers. Its operations include College Park, Norcross, Washington, Sandersville, Dalton, and Massena. The company was founded by S. Matthew Schultz and Bryan Huber on October 15, 1987 and is headquartered in Henderson, NV.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Bollinger Band and P&F Low Pole.
CLSK is up +8.76% in after hours trading so I suspect it will gap up again tomorrow after reporting earnings after the close today. It had an incredible push above overhead resistance and seems ready to go test the prior top. This is clearly a "Boom or Bust" stock. That next level of overhead resistance is over 30% away. The RSI is amazingly not overbought right now. Today saw a new PMO Crossover BUY Signal. Stochastics are well above 80 and still rising. The industry group is doing well as is the stock against the SPY and the group. The stop is set as deeply as I was able at 7.9% or $9.67. Position size wisely on this low-priced stock.
The weekly chart shows us a positive RSI that is not overbought and a weekly PMO that is beginning to surge above the signal line. The SCTR is reading about as high as it can go. I own CLSK.
Nu Holdings Ltd. (NU)
EARNINGS: 02/22/2024 (AMC)
Nu Holdings Ltd. is a holding company, which engages in the provision of digital banking services. The company was founded by David V'lez Osorno, Cristina Helena Zingaretti Junqueira, and Adam Edward Wible on February 26, 2016 and is headquartered in George Town, Cayman Islands.
Predefined Scans Triggered: New 52-week Highs and P&F Double Top Breakout.
NU is down -0.41% in after hours trading. Price broke out yesterday and today saw follow through. The RSI is positive and not overbought. The PMO is on a relatively new Crossover BUY Signal. Stochastics are above 80 and still rising. The Banks industry group is not fairing well, but this stock is challenging new 52-week Highs. It is also outperforming the SPY. Consider a 7.4% stop around $8.92.
With other Banks suffering this one is looking incredibly strong. The only issue I see is the overbought weekly RSI. We have a new weekly PMO Crossover BUY Signal. The SCTR is in the hot zone above 70. I think it could start to challenge all-time highs.
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 45% long, 0% short. Divested during earnings, replenishing the portfolio again. I own CLSK.
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 2024 DecisionPoint.com
Watch the latest episode of DecisionPoint Trading Room with Carl & Erin Swenlin Mondays on the DecisionPoint 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