My bullish scans continue to provide a small amount of results. Today, the Diamond Scan revealed 11 results, which is down from the 18 I had yesterday. The Diamond Dog Scan continues to produce numerous shorts. Today, there were 138, which is up from 119 yesterday. I decided I wanted a larger pool of bullish candidates, so I ran my more liberal scan that opens the search criteria, Bullish EMAs/Mid-Range SCTR Scan. That presented me with 49 candidates and I found some that I think you'll find interesting.
Welcome to "DecisionPoint Daily Diamonds", a newsletter in which we highlight five "diamonds in the rough" taken from the results of one of my DecisionPoint scans. Remember, these are not recommendations to buy or sell, but simply stocks that I found interesting. The 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. There are no guaranteed winners here.
Current Market Outlook:
Market Trend: DP Trend Models are on BUY signals for the SPX.
Market Condition: The market is losing support. The SPX and OEX both logged ST and IT PMO SELL Signals.
Market Environment: It is important to consider the "odds" for success. Here are the current percentages on the Silver and Golden Cross Indexes, which began to rise again after today's action:
- Silver Cross: 69.40% SPX ITTM Buy Signals (down -0.6% from yesterday)
- Golden Cross: 66.2% SPX LTTM Buy Signals (slight increase +0.2%)
Avangrid Inc (AGR) - Earnings: 10/22/19
AGR broke out this past week and, while it hasn't done much since then, it has managed to hold onto support. Volume is looking very healthy as the OBV never really lost that much ground on the deep decline that started off the month. The OBV has been riding higher for the rally, suggesting a lot of investor interest.
Allegion Public Ltd (ALLE) - Earnings: 10/24/19
I've been noticing a lot of bull flag formations on the bullish scan results. I like this particular flag better than the others because (1) there is a lot of upside potential off the flag that lines right up with overhead resistance at $12 and (2) the PMO is now above the zero line, with plenty of headroom before it becomes overbought.
Unfortunately, the OBV isn't looking bullish. The short-term declining tops don't inspire confidence, but I'll forgive that for now. I didn't annotate it, but there is a reverse divergence between the OBV tops in mid-July and mid-September, with the corresponding price tops showing a huge difference and moving lower. The increase in volume didn't push price as high as it could have. If I see a decisive price breakout from the flag, I'll look for the gap from late July to close and price to move back toward $12.
Duke Realty Corp (DRE) - Earnings: 10/22 - 10/28/19
A nice ascending triangle is the main bullish feature of DRE. We got the breakout, as expected, and today we saw a slight pullback. Price remained above support. The PMO is on a BUY signal that was generated above the zero line. The SCTR is rising nicely. OBV is in a range with declining tops, which is not the most bullish setup, but the other indicators and price movement still made this enticing.
Enbridge Inc (ENB) - Earnings: N/A
Here we have another flag formation. In this case, it has executed with a nice upside breakout. Price is very close to overhead resistance, but, if the flag executes as expected, price should have no trouble breaking out. The OBV looks great, rising with price, and the PMO has plenty of upside available to it before it becomes overbought.
Weingarten Realty Investors (WRI) - Earnings: 10/29/19
The bull flag on this one has already executed. Following the breakout, price consolidated a bit sideways. Today saw a nice breakout above resistance at the April top. The PMO is rising strongly and isn't that overbought. OBV is okay. I'd like to see a break above the previous top; it looks like that will happen on the next price rise. Despite the OBV not reacting, notice that today's breakout came on higher volume than yesterday. Not above-average volume, but positive. The SCTR is about to reach the "hot zone" above 75.
Full Disclosure: I do not own any of the stocks above and I am not planning on purchasing any at this time. I'm currently about 60% in cash.
Watch the latest episode of DecisionPoint with Carl & Erin Swenlin LIVE on Mondays 5:00p EST or on the StockCharts TV YouTube channel here!
Technical Analysis is a windsock, not a crystal ball.
Happy Charting!
- Erin
erinh@stockcharts.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."
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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