It is ETF Day! I wanted to open by letting you know that I've created a new scan that I'm calling the PMO Surge Scan. It has many variables, but primarily we are looking for PMO bottoms above the signal line. Stocks that fit this profile are generally ready to "surge" after a short period of consolidation or decline which turns the PMO lower. The "surge" then begins and the PMO turns back up.
I ran this scan on ETFs today and found two ETFs, EUO and PFIX. I didn't present either as there were still a few problems, but both are certainly worth a watch as they both are runner-ups today.
Once our new DP Scan Alert blog is open, the Surge Scan as well as the Diamond PMO Scan and Momentum Sleeper Scan, a subscriber to the service will receive the results from all three scans with links to the charts on StockCharts. We will also include PMO, Silver Cross and Golden Cross signals for the SP500 and NDX. Pretty cool! Stay tuned for more information.
The ETFs selected today look pretty good, but I will caution that the market looks toppy so all positions should have stops, particularly new adds. The Financial sector is looking up. Even bank ETFs look enticing. I would still stay away from banks, but the rest of the sector is showing promise. Well, Banks are too, I just don't trust them.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": BJK, IAI and XHB.
Runner-ups: EUO, PFIX, IYT, PALL and KIE.
** JULY VACATION **
I will be in Europe 7/14 - 7/27 so there will not be any Diamonds reports or trading rooms during that time. All subscribers with active subscriptions on 7/27 will be compensated with two weeks added to their renewal date.
RECORDING LINK (4/14/2023):
Topic: DecisionPoint Diamond Mine (4/14/2023) LIVE Trading Room
Passcode: April@14th
REGISTRATION for 4/21/2023:
When: Apr 21, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (4/21/2023) 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 (4/10):
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.
Stop levels are all rounded down.
VanEck Vectors Gaming ETF (BJK)
EARNINGS: N/A
BJK tracks a market-cap-weighted index of global companies that generate at least 50% of revenues from gaming and related activities. Click HERE for more information.
Predefined Scans Triggered: None.
BJK is up +1.99% in after hours trading. On Tuesday BJK broke out on a likely initiation or breakaway gap. The RSI is positive and not overbought on this breakout. The PMO gave us a 'surge' or bottom above the signal line. The OBV is confirming the rising trend and breakout as it has reached new highs. Stochastics are very strong above 80 and relative strength is steadily increasing. I've set the stop below support at 8% or $42.20.
The weekly chart is also strong so this could be considered a more intermediate-term investment. The weekly RSI is positive and not overbought. The weekly PMO has also made a 'surge' or bottom above the signal line. The SCTR is incredibly strong at 98.4%, putting at the top of the "hot zone"* above 70. Upside potential is over 25%.
*We call it the "hot zone" because it implies that the stock/ETF is in the top 30% of its "universe" (large-, mid-, small-caps and ETFs) as far as trend and condition, particularly in the intermediate and long terms.
iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI)
EARNINGS: N/A
IAI tracks a market-cap-weighted index of investment service providers as well as securities and commodities exchanges. Click HERE for more information.
Predefined Scans Triggered: P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
IAI is down -0.73% in after hours trading. IAI broke out on Monday above near-term resistance and today formed a bullish engulfing candlestick. The RSI is rising above net neutral (50) and is not overbought. The PMO is on an oversold BUY signal and rising. The OBV is confirming this strong rally as it moved up quickly. Stochastics are rising above 80. I've set the stop below support at 6.3% or $87.72.
The weekly RSI is negative, but rising. The weekly PMO is turning back up. The OBV doesn't look quite as appetizing on the weekly chart and the SCTR, while rising, is still not close to the "hot zone". I would consider this a short-term investment. It has upside potential of about 21%.
SPDR S&P Homebuilders ETF (XHB)
EARNINGS: N/A
XHB tracks a broad-based, equal-weighted index of US companies involved in the homebuilding industry. Click HERE for more information.
Predefined Scans Triggered: Improving Chaikin Money Flow, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
XHB is down -0.14% in after hours trading. XHB also broke out on Tuesday with a nice continuation today. It was also likely a breakaway gap. The RSI is positive and not overbought. The PMO is on a Crossover BUY Signal that occurred just below the zero line. The OBV is confirming the rally, breaking out above the previous top like price. Stochastics are above 80 and relative strength is really kicking in. The stop is set at 7.6% or $63.89.
The weekly chart is very favorable. The weekly RSI is positive and has been all year. The weekly PMO has bottomed above its signal line. The OBV is in a rising trend and the SCTR is well within the "hot zone" above 70. Upside potential is over 22%.
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 30% long, 2% short.
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 2023 DecisionPoint.com
Watch the latest episode of DecisionPoint Trading Room 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