As I perused my ETF Tracker list (available to StockCharts.com members), I was struck by the number of bearish double-tops that were beginning to develop. I opted to stay away from those charts. They didn't look horrible or anything, in fact, many had rising PMOs still. Instead I decided to go with yesterday's Materials theme with the exception of one international ETF.
You should definitely review the runner-ups today. There aren't many and I like the charts. I just preferred the ETFs that I selected for inclusion today.
Time to send in reader requests! What symbols are catching your eye? Do you have a name in your portfolio you're uncertain about? Send them before Thursday's market close for possible analysis. If I don't cover them, I'll write them down for the Diamond Mine trading room.
Good Luck & Good Trading!
Erin
Today's "Diamonds in the Rough": EPOL, GDXJ and SLV.
Runner-ups: CPER, GDX and SARK.
RECORDING LINK (11/4/2022):
Topic: DecisionPoint Diamond Mine (11/4/2022) LIVE Trading Room
Start Time: Nov 4, 2022 09:00 AM
Recording Link HERE
Passcode: November*4
NEXT DIAMOND MINE Trading Room on November 11th 2022:
When: Nov 11, 2022 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (11/11/2022) 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 last 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 MSCI Poland Capped ETF (EPOL)
EARNINGS: N/A
EPOL tracks a market-cap-weighted index of the broader Polish equity market. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Blue and P&F Low Pole.
EPOL is up +0.22% in after hours trading. After a gap up on Friday, EPOL has been steadily rising and holding onto its short-term rising trend without trouble. Today's pullback was needed as the RSI was in overbought territory. The PMO was completely unperturbed by today's decline. Volume was elevated on the selling but not enough to change the rising trend of the OBV. The PMO is rising strongly and Stochastics are oscillating above 80. The stop is set at 7.7%, below gap support around $12.34.
I love the weekly chart. We have a breakout from a bullish falling wedge and a brand new weekly PMO crossover BUY signal. The weekly RSI is still negative and is currently flat; would like to see improvement there. The SCTR is in the "hot zone" above 70. It's current 83.3% reading suggests it is in the top 7% of all ETFs in terms of trend and condition in all three timeframes. I'm going with the 2020 top as the upside target.
VanEck Vectors Junior Gold Miners ETF (GDXJ)
EARNINGS: N/A
GDXJ tracks a market-cap-weighted index of global gold- and silver-mining firms, focusing on small caps. Click HERE for more information.
Predefined Scans Triggered: Bearish Harami, P&F Spread Triple Top Breakout and P&F Double Top Breakout.
GDXJ is up +0.47% in after hours trading. I don't know if I'm cheating here, but I presented GDX, the Gold Miners ETF three weeks ago so I went with the Junior Gold Miners ETF today. I believe Gold Miners are finally on the way to breaking out. Gold is looking more healthy as are Materials in general. This one is a bit more volatile than GDX so consider looking at GDX if you're not ready to ride this one. It is nearing an IT Trend Model "Silver Cross" BUY signal. A 3% decline today did nothing to deter the PMO from rising strongly. The RSI is positive and not overbought. The OBV is confirming. Stochastics are above 80 and relative strength is picking up. The stop is set below the 20/50-day EMAs and July low around 7.1% or $29.59.
The weekly chart show a cup-shaped bottom developing and a brand new weekly PMO crossover BUY signal. The weekly RSI is still negative, but is rising. The SCTR is improving quickly, but is below average currently. I've set upside potential at the 2019 highs.
iShares Silver Trust (SLV)
EARNINGS: N/A
SLV tracks the silver spot price, less expenses and liabilities, using silver bullion held in London. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Blue and Bearish Harami.
SLV is up +0.15% in after hours trading. I'm bullish on Gold, but that doesn't always mean I'm bullish on Silver. Currently it holds true. Gold and Silver do track similarly, but they're different enough that I don't put them in the same basket. Yesterday saw a strong breakout and today we got a textbook pullback to the breakout point. It closed above the 200-day EMA which was important to me. It's also holding support at multiple highs/lows from this year. The RSI is positive and the PMO is making new highs. The OBV is trending higher and Stochastics are above 80. Relative strength has really picked up for this ETF. The stop is set below the 50-day EMA at 7.2% around $17.96.
Price is attempting to breakout above longer-term resistance as well as short-term resistance. There is a cup-shaped price bottom and the weekly RSI is now in positive territory above net neutral (50). The weekly PMO is rising on a recent crossover BUY signal. The SCTR is outstanding at 95.0%.
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 50% exposed. Contemplating the addition of Silver.
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