The Big 3: PH, DXCM, UNP

get your podcasts. Welcome back to train 360. I'm Marcus Coffee. It's time for the big three. Three stocks, three charts, three trades. Rick Duquette here in studio. He's going to take us through the charts. We're also joined by Dan Deming Managing partner financial. Dan is always a pleasure. Good to see you both Dan. Let's talk big picture marketplace. It's a little wobbly recently but slow motion kind of movement. What do you make of it. Yeah. Alex. Yeah it is some sideways price action. Interesting that you know volumes to I guess you're getting this pre Labor Day kind of trading environment that some seasonality unfolding as well as we see volumes dipping here the last week or so. But next week I think there's plenty of things to focus on before we close out the month. And certainly when you look at PCE data, Jackson Hole next week, those are a couple items that I think could influence the market. And we got expiration coming up on Friday. But you know, when you look at the different sectors, Alex, even though we're seeing a little bit of weakness here the last week or so, you know you're still seeing a rotation, you're still seeing certain sectors outperform. And you know we're going to highlight some of those today I think in some of the trade examples. Yeah. I'm looking forward to this discussion some of these names because not only maybe are they overlooked. They're just beyond like that set of, you know, 50 names that everyone discusses on a daily basis. So talk to us about the first one. It's Parker Hannifin. You know, I was just telling Rick, I'm not even sure I've heard of this business. You will walk us through it. Yeah. Well, they pretty much involved in a lot of the things that drive this country, that's for sure. And just from a global perspective as well, aerospace being one of them, certainly they're well suited in that area. And you know, you got industrial machinery complex as well. You got a lot of infrastructure that they support in that realm as well. So, you know, they're pretty much spread out across the industrial sector. And it's a name that flies under the radar. Certainly their earnings on August 6th gave them a big boost to the upside. We did see a gap higher. We're drifting back down. And I think today's trade example is to try to take advantage of closing that gap with the opportunity to get long. So again just a name that gets probably not the recognition it deserves. But if you look at the chart, which Rick will, I think you'll identify that it's been a pretty consistent upward momentum type of stock. And the strategy you were looking at was, was selling the put below the market, kind of leaning on that, that I guess recent weakness. Dan. Yeah. To fill the gap. Yeah. Selling the what is it? The 990 put for about $15. Now we did see it come off the lows, so probably a little cheaper here. But the idea here, Alex, is that we gapped higher on earnings. I'd like to see the stock fill that gap and then possibly find some stability where I see some support for longer term hold. But I think at this juncture the fact that it did gap higher, I still before jumping into this name, I think there's an opportunity here to collect some premium and possibly get put into the name after it fills that gap. Sweet. Good stuff. And I know you got the chart up here, Rick, as we kind of build on what Dan just kind of walked us through, if you want to go through the technicals for us. Sure. So that trade had a break even roughly 9.75. That aligns with one of the areas I highlighted here. That was a low point that we saw here before our gap. So around there is where this trade would start to break even in this particular example. So we did hit our highs just shy of 1100 recently here. From there we've been transitioning in a downward channel type shape between our two white lines. There we can see that now we are quite close to filling this gap that was formed near 1010. So that's one area that really sticks out. That's a notable area. You know these gaps, we keep track of them for a reason. Oftentimes they can be filled. You know, it's not a guarantee or anything like that, but it happens commonly enough that it's a notable piece of advice that many traders would be on the lookout for, to just keep these gaps in mind going forward. 997 also stands out. That was a high point that we saw here, and we repeatedly struggled to break above it during the recent months here. A low point here after before our decline was 1056. We bottomed out there a couple times and then had a bit of a breakdown as well. Still, our upward sloping trend line is still in play. You can see our blue line here has still maintaining its integrity here. So we are getting quite close to that area. So that could be another breakdown point to watch out for if you had more of a bearish perspective. So we find ourselves right on the nose of our 21 day exponential moving average. That comes in just shy of 1022. We have our five day EMA representing one week as well at 1035 just above. Meanwhile, our 63 day in gold representing one quarter 9.97 RSI trending lower. We are below our green RSI momentum trend line here, so look to see if we slip below that 50 mid line as well for more of a bearish skew. Finally, we can see our volume profile study shows nodes here and here near about 1055 to 1078 and centered around roughly 970 or so. Awesome. Appreciate it. Rick. As we go back to Dan, we look at number two. We got Dexcom on the mind as well. Dan, walk us through what you're looking at here with Dexcom. Well, Dexcom just got pounded. Alex the last year and a half or two years because of the GLP one and the idea that the insulin pumps might not be as in demand as what was initially anticipated, but now found its footing. And I think, you know, from a longer term perspective, certainly just the area they're in, that medical device area within the insulin delivery. But also just the idea of the pumps could be used for other things as well. Moving forward. I think the stock is rebounding here and it's going to continue to find further upside. So I think that's the idea here is to focus on the stock that looks like it's regaining its footing and has potential to continue to move higher. And today's trade example is a buy right. Alex just buying the stock and then selling the January call the January 1st hundred call for about $5.80 gives you about 17% capture zone to the upside over the next four months and an exit point as well. And I think it also lowers the break, even if we don't see it necessarily attain that level here in the next quarter. But overall, a name that I think is going to continue to maintain this upward momentum. And Rick, speaking of upward momentum charts, certainly looks like it's getting a little bit of improvement here from a bullish standpoint. What do you make of the technicals. Yeah largely rainbow rangebound for much of the year between about 54 to 80 or so. But recently after earnings a gap to the upside here that has transitioned into another upward channel type shape. We topped out at 9196 here a couple of times here. We haven't quite broken that level yet. Relative lows come in near 8882. And also we had these this set of highs here near 79. We never quite tested that one either. So that's another interesting area to these candle activity also is worth mentioning. Here we are on pace to form a bullish bullish engulfing type of candle where the real body of today's green candle, the distance from the open to the close is completely encompassing. The previous day's smaller red candles. Real body here. So one crucial step is that for this to develop, we need to hang on to that into the close. We also need a second follow through day of upside activity to confirm it. But you know, potentially something interesting happening here. Just calling it out for everyone's attention. So now five day EMA in dark blue 8983 is where this one comes in. We are pushing our way back above it. It's been supportive in recent days. Here are other moving averages are quite far away from our current price activity. So that kind of speaks to the strength of the recent trend. We can see a little bit of bearish divergence on the RSI, meaning that price made higher closes. But the RSI has been trending downward and also backing out of the overbought area. Now this doesn't mean a collapse is impending or anything. It just kind of tells us the pace of the gains is slowing down. That could also mean that it's more of a consolidated phase before the next leg up. So look for breakouts to help form your directional bias here. Now just focusing on the past three months of our volume profile here. Nodes stand out here, here and here. Kind of just looking for the key points of our recent rally here. So around 84, 85 and 90 roughly. Good stuff Rick. Appreciate it. And obviously a stock that has made a bit of a transition recently with the recent jump post the most recent earnings. Dan, your final name. We're looking at the railroads company headquartered in my hometown. That's Union Pacific. What stands out here? Well what stands out is just the sector in and of itself. Alex idea here that transportation is going to continue to evolve. And certainly as we continue to see oil prices holding up at these levels and the potential that we could see a shift as railroads and particularly possibly electric electrification of railroads might transition as well in the coming decades. And I just think that as we continue to see this evolution that's taking place, that there's a potential for railroads to kind of come back into the fold to some degree as far as delivery mechanisms. So Union Pacific is to me is a leader there. Certainly southern is another one, but that chart's not as impressive. So I looked at UNP here. Now it is up from what I structured this trade example Alex. But today's trade example is basically buying a short term call. Spread the September call spread 29 days out to 303 15 calls spread to capture pushed back towards the recent highs and then selling the 290 put the finance a big chunk of that call spread. So you get a big capture zone there to the upside. And again, short dated exposure. But the opportunity to get put in a stock, if we do see some weakness over the next month. Appreciate it. Good stuff. Rick. Talk us through the technicals. I was just seeing a peek at that chart we had up there. It's a nice looking chart. Pretty consistent. Higher highs higher lows up 45% off of those lows. Our 52 week lows to be you know longer term view here. So as you said a strong move. And recently though we saw kind of this range bound area after earnings. We had a jump up but then didn't really have too much net movement until mid June. Late June here transition into this steep climb here that took us into these highs near 31599. So from there we have pulled back a bit here. We kind of solidified around 286, lining up with an old high and a subsequent low here. From there, our downward sloping trend line in blue off of those highs has been broken. Now we once again see ourselves forming a channel type shape here. One trend line going across the lows. Duplicate it, put it across the highs. It gives you a projection for where you might find potential resistance. But today's actually candle is pushing above that level as well. So if we get a little bit further, we would be possibly breaking above our previous day's high here. And again another bullish engulfing candle type shape forming here. Much more pronounced than our last one. As yesterday's real body was so small, so narrow between the open to the close, so horizontal levels. As I said to the downside, 293, 286 as well, and then to the upside. A break above 308 or so would be notable. And a break above 316. Our moving averages in this case show that our five day EMA in dark blue, the closest one once again. 30152 our teal 21 day comes in just shy of 296 or so RSI making new highs. We have not broken above that overbought area just yet here, so that would be the next area to breach. Our downward sloping red trend. Line was broken though suggesting improving momentum. So finally here our volume node comes in around 291 to 297. So this is the heaviest trading concentration area anywhere close to our current activity. So that's the place to watch out for