ETF Day has been challenging during this bear market. I was resorting to looking at every U.S. ETF in a CandleGlance to make my selections. DecisionPoint has a ChartList called the ETF Tracker.
We're only allowed three ChartLists to be resident on our website so while this one is great, it isn't as important as the lists included on our website (DPA list, Sector list and Golden Cross/Silver Cross Indexes list). If you happen to be a StockCharts subscriber, I'm happy to share it with you. If you are not, I can share the list on a pdf and you can use your favorite charting program.
I will always go to the ETF Tracker first on ETF Day. It contains the most important industries, sectors and index ETFs. It is a great starting point and gives me a clear picture of where strength might lie without having to click through the entire Industry Summary on StockCharts. I'm thinking of switching to this during our free trading room on Monday. I think a detailed review of the Summary is appropriate for the Diamond Mine.
I found some quick hits today (thin stops, but limited upside potential) and a risk taker's paradise (deeper stop, high upside potential). The runner up ETFs are definitely worth a look. One theme today was Energy. I chose what I thought was the best of the Oil related industries. I didn't include any Utilities, but XLU and other ETFs that track Utilities hit my scans. I don't think any are ripe, but I thought I'd mention it here since you won't find them as runners-up.
Good Luck & Good Trading!
Erin
Today's "Diamonds in the Rough": ITA, KIE and XES.
Runners-up: BUG, JETS, IEO, UMI, XLE and IGN.
RECORDING LINK (10/14/2022):
Topic: DecisionPoint Diamond Mine (10/14/2022) LIVE Trading Room
Passcode: October#14
REGISTRATION LINK (10/21/2022):
When: Oct 21, 2022 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (10/21/2022) 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 Monday 10/17 recording:
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.
iShares U.S. Aerospace & Defense ETF (ITA)
EARNINGS: N/A
ITA tracks a market-cap-weighted index of US manufacturers, assemblers and distributors of airplane and defense equipment. Click HERE for more information.
Predefined Scans Triggered: P&F Double Top Breakout.
ITA is down -0.73% in after hours trading. I liked the strong breakout from the double-bottom pattern. Honestly wish I'd seen this one yesterday. Overhead resistance is strong right here at the late June high and 200-day EMA so we could see a small pullback before it rallies further. The PMO is rising strongly and Stochastics just moved above 80. The RSI is positive and not overbought. I set the stop at 4.5% around $95.33. The stop is thin because upside potential is somewhat limited.
There's no reason ITA could hit new all-time highs, but I'm not ready to count on it. A 14.1% gain on a 4.5% stop is excellent in my opinion. The weekly RSI is about to move above 50. The PMO has turned up and the SCTR is a healthy 91.3%.
SPDR S&P Insurance ETF (KIE)
EARNINGS: N/A
KIE tracks an equal-weighted-index of insurance companies, as defined by GICS. Click HERE for more information.
Predefined Scans Triggered: Hollow Red Candles.
KIE is down -0.08% in after hours trading. As noted above, it has a bullish hollow red candlestick. A hollow red candlestick is basically the opposite of a bearish filled black candlestick. It's considered bullish because while price did close down for the day, it closed above the open, suggesting bulls exerted more influence at the end of the day. Price still has overhead resistance to deal with, but it nearly triggered a "Silver Cross" IT Trend Model BUY signal as the 20-day EMA nearly passed up the 50-day EMA (a "silver cross"). The PMO is rising, is not overbought and just moved above the zero line. Stochastics are above 80. It's been a strong performer since August. The stop is set thinly at 4.4% or around $37.24.
It's been traveling in a trading range and price is about halfway to the top of it. I expect to see a breakout, but even if it just gets to overhead resistance that would be a 9.1% gain with a thin 4.4% stop. I like to have my targets to be twice the stop percentage. The weekly RSI is now positive and the weekly PMO is about to trigger a crossover BUY signal. The SCTR is a very strong 95.1%.
SPDR S&P Oil & Gas Equipment & Services ETF (XES)
EARNINGS: N/A
XES tracks an equal-weighted index of companies in the oil & gas equipment and services sub-industry of the S&P Total Market Index. For more information, click HERE.
Predefined Scans Triggered: New CCI Buy Signals, Stocks in a New Uptrend (Aroon), Moved Above Upper Price Channel and P&F Double Top Breakout.
XES is up +0.01% in after hours trading. This one caught my eye immediately when I saw today's beautiful breakout. Earlier this week there was a "silver cross" of the 20/50-day EMAs. This breakout is accompanied by strong indicators. The RSI is oscillating above net neutral (50). The PMO is on a crossover BUY signal and has moved above the zero line. The OBV is confirming the rising trend and Stochastics are above 80. Relative performance is outstanding. This one is more risky given the deep 8.4% stop around $61.95.
Upside potential makes the 8.4% stop seem less daunting. Even if price just reaches overhead resistance at 2022 highs, that would be a 26.4% gain. The weekly RSI just moved into positive territory and the weekly PMO is turning back up. The SCTR is excellent at 97.9%.
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 15% exposed with a 5% hedge. I know I said I would be buying more, but I opted not to get too crazy too soon. Between yesterday's filled black candlestick on the SPY and today's decline, I decided to play it safe. I'm happy with this exposure and my hedge YANG performed spectacularly today.
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 2022 DecisionPoint.com
Watch the latest episode of DecisionPoint with Carl & Erin Swenlin on Mondays 7:00p 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:
DecisionPoint Shared ChartList and DecisionPoint Chart Gallery
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
For more links, go to DecisionPoint.com