We certainly had an improvement in Diamond Scan results, as I saw 18 v 11 on Friday and only 90 on the Diamond Dog Scan. Also of interest, the Dogs that presented themselves showed minimal results for Utilities, Consumer Staples and Real Estate (a total of 9 of the 90). The majority of the Diamond Scan results were in the real estate sector, where the charts are still looking pretty good. You be the judge.
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 and 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: 69.20% SPX ITTM Buy Signals (down -0.2% from Friday)
- Golden Cross: 66.4% SPX LTTM Buy Signals (slight increase +0.2% from Friday)
Americold Realty Trust (COLD) - Earnings: N/A
COLD has been in a nice rising trend channel all year long. The PMO has seen mostly clean signals and today we nearly saw that PMO BUY signal. While COLD didn't close above overhead resistance at the September top, it did penetrate it. Volume has been healthy and we can see accumulation over the past three trading days. I am expecting a decisive breakout and another run to the top of the rising trend channel. If this area of resistance holds and price can't break out, I'd delete this one from the watch list.
HCP Inc (HCP) - Earnings: 10/29 - 11/4
An excellent yield of 4.15% was one of the attractions here. Resistance is fairly close, but, given the positive PMO and the OBV breaking out of a declining trend, I think this still has merits. Notice in the thumbnail that $35.40 held for over a week as resistance, but it broke out last Friday and continued higher today. This one may need a pullback to that area first before it makes that breakout run.
Spirit Realty Capital Inc (SRC) - Earnings: 11/4 - 11/8/19
A bullish ascending triangle executed on this one last Thursday, but it didn't make the scan's criteria because the PMO had not been rising more than three days. It is just about ready to trigger a PMO BUY signal and volume looks positive. SRC closed unchanged today, which I would equate to a pause in the breakout rally. The PMO is getting a little flat, but if it generates a BUY signal, with price subsequently breaking out and trading completely above $48, I would look for higher prices.
Ventas Inc (VTR) - Earnings: 10/24 - 10/28/19
Nice little short-term breakout on today's action. It traded almost completely above resistance all day. The PMO has turned up and is readying for a BUY signal. The OBV paused and is twitching, but is ultimately in a rising trend which I find positive. It looks like accumulation is on its way and with it higher prices.
Welltower Inc (WELL) - Earnings: 10/28 - 11/1/19
WELL has been in a rising trend channel since May. The PMO has clean crossovers on this one and we are about to see a clean BUY signal very soon. What I mean by "clean" is that we don't see hesitation and twitching. The OBV is rising nicely. My caveat with this chart is that price is right in the middle of that trend channel and is vulnerable to a pullback toward the bottom of the channel. A top well below the top of the trend channel would concern me. However, if it is going to react as it has in the past with a touch at the top of the channel, that would be a nice gain. As an intermediate-term investment, it has merit given the strong rising trend.
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.
Technical Analysis is a windsock, not a crystal ball.
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."
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