Scans didn't produce a great deal on the ETF side (on the stock side too), but it was clear what the winning area of the market is. Rather than pick three ETFs from this area, I'm listing them in the "Runners-up" section.
The ETFs that made up most of the scan results were related to Energy, Crude Oil in particular. Given the rally in Oil prices it isn't a surprise. It was really the only area looking strong today.
The Vietnam ETF (VNM) was the odd man out of the scan results so I included it. The final selection came from our ETF Tracker ChartList which you can find on our website in the upper lefthand corner.
The market is pulling back and offering some interesting entries among stocks. Just be sure to use stops in case this current pullback turns into a big correction.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": IPO, OIH and VNM.
Runners-up: FTXN, IEO, IEZ, PSCE, PXJ, RSPG, XES and XOP.
RECORDING LINK (9/1/2023):
Topic: DecisionPoint Diamond Mine (9/1/2023) LIVE Trading Room
Passcode: September#1
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When: Sep 8, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (9/8/2023) LIVE Trading Room
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Here is the last recording from 8/28 - No recording on Labor Day:
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.
Renaissance IPO ETF (IPO)
EARNINGS: N/A
IPO tracks a market cap-weighted index of recent US-listed IPOs. The fund acquires issues within 90 days or sooner after IPO and sells after 3 years. Click HERE for more information.
Predefined Scans Triggered: P&F High Pole.
IPO is down -0.70% in after hours trading. Price is up against overhead resistance and is in the process of consolidating the recent rally out of the bullish double-bottom. The minimum upside target of the double bottom pattern has pretty much been hit, but it is the 'minimum' target so we could see some followthrough. Based on the bullish PMO with its new Crossover BUY Signal, I like its chances. The RSI is positive and Stochastics are oscillating above 80 suggesting internal strength. Relative strength is excellent against the SPY. The stop is set beneath support at 7.2% or $30.60.
The weekly chart suggests this could be an intermediate-term investment given the positive weekly RSI, weekly PMO attempting to turn back up and StockCharts Technical Rank (SCTR) sitting comfortably at the top of the hot zone* above 70. I would prefer to see the PMO rising so keep a close eye on it until that happens. I've limited upside potential to about 14%, but I do believe it can break out from that level should the market get back on track.
*If a stock/ETF is in the "hot zone" above 70, it implies that it is stronger than 70% of its universe (large-, mid-, small-caps and ETFs) primarily in the intermediate to long terms.
VanEck Vectors Oil Services ETF (OIH)
EARNINGS: N/A
OIH tracks a market-cap-weighted index of 25 of the largest US-listed, publicly traded oil services companies. Click HERE for more information.
Predefined Scans Triggered: P&F Double Top Breakout.
OIH is unchanged in after hours trading. OIH saw a nice breakout yesterday and despite the bearish filled black candlestick printed, today it rallied and remained above support. The RSI is positive and not yet overbought. The PMO is rising toward a Crossover BUY Signal. Stochastics are above 80 suggesting internal strength. This ETF is beginning to reignite its outperformance against the SPY. The stop is set beneath support at 7.1% or $327.68.
The weekly chart suggests this is an intermediate-term investment candidate. The weekly RSI is positive and not yet overbought. Price is breaking out. The weekly PMO is rising and not overbought. The SCTR is at the top of the hot zone. I would look for a gain of possibly 30%+ if it keeps its positive momentum going.
VanEck Vectors Vietnam ETF (VNM)
EARNINGS: N/A
VNM tracks a market-cap-weighted index of Vietnamese stocks. The fund covers companies listed or domiciled in Vietnam or that generate a majority of their revenues in Vietnam. Click HERE for more information.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Keltner Channel, New 52-week Highs and P&F Double Top Breakout.
VNM is up +0.06% in after hours trading. Price is now up against resistance so there may be a small pullback ahead of more rally, but this rising trend has been steady. The RSI is in positive territory and there is a PMO Crossover BUY Signal on tap for tomorrow. Stochastics are strong above 80 and relative strength is there against the SPY. I've set the stop beneath the 50-day EMA at 6.9% or $14.42.
The weekly chart is very favorable and suggests this one can be held in the intermediate term. The weekly RSI is positive, albeit a bit close to overbought. The weekly PMO is rising strongly and isn't overbought yet. The SCTR is well within the hot zone and volume is definitely going in the right direction based on the OBV. I've opted to set the upside target about halfway into the next trading range.
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 40% long, 0% 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:
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
For more links, go to DecisionPoint.com