ETF Day can be challenging. The universe that I scan includes nearly every ETF out there, but that pool of symbols is much smaller than the broad market. I only found a few scan results today and only one of them made the list.
When I don't get the results I need, I do a review of our ETF Tracker ChartList which is available to you on our Blogs and Links page. From there I found two ETFs that are lined up well, they just didn't fit the criteria for my scans.
A few notes about the runners-up, MJ and PPH were scan results. JETS was one that I liked. I nearly included it today, but it had a bearish shooting star candlestick that had me worried. It is worth a watch list spot.
Good Luck & Good Trading,
Today's "Diamonds in the Rough": BDRY, FDN and WEAT.
Runners-up: MJ, PPH and JETS.
RECORDING LINK (11/3/2023):
Topic: DecisionPoint Diamond Mine (11/3/2023) LIVE Trading Room
REGISTRATION for 11/10/2023:
When: Nov 10, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (11/10/2023) LIVE Trading Room
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Here is the last recording from 11/6:
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.
Breakwave Dry Bulk Shipping ETF (BDRY)
BDRY tracks an index of long-only exposure to the nearest calendar quarter of dry bulk freight futures contracts on specified indexes. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Green and Parabolic SAR Buy Signals.
BDRY is unchanged in after hours trading. This is a trading range which in general I don't care for, but given the bounce off the support zone combined with positive indicators, I'm looking for it to at least get back to the top of the range. This is a low priced ETF so position size wisely. The RSI just moved into positive territory and the PMO is gently rising toward a Crossover BUY Signal. Stochastics are rising strongly and it is beginning to outperform the SPY. The stop is set at 7.8% or $4.97.
Out of the gate I noticed the dismal StockCharts Technical Rank (SCTR) which is in the basement, not even close the hot zone* above 70. The weekly RSI is also negative. While the weekly PMO appears to be surging above the signal line, I would keep this one in the short-term timeframe only.
*If a stock 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.
First Trust Dow Jones Internet Index Fund (FDN)
FDN tracks a market-cap-weighted index of the largest and most liquid US Internet companies. Click HERE for more information.
Predefined Scans Triggered: New CCI Buy Signals, New 52-week Highs, P&F Spread Triple Top Breakout, Stocks in a New Uptrend (Aroon), Moved Above Upper Price Channel and P&F Double Top Breakout.
FDN is down -0.01% in after hours trading. With the Communication Services (XLC) sector looking good, I was happy to see this ETF's setup. Price is in a "V" Bottom formation that implies a breakout will occur above the October top. The RSI is in positive territory and the PMO is rising on an oversold Crossover BUY Signal. Stochastics are above 80 and relative strength is rising. I've set the stop as close to support as I could at 8% or $147.78.
I immediately saw a bullish cup with handle pattern on the weekly chart that implies we will see an upside breakout from the handle. The weekly RSI just moved back into positive territory and the weekly PMO is decelerating, albeit still declining. The SCTR is at the top of the hot zone. If we get the breakout I expect, I believe you could consider this intermediate-term. Upside potential is about 29%.
Teucrium Wheat Fund (WEAT)
WEAT tracks an index of wheat futures contracts. It reflects the performance of wheat by holding Chicago Board of Trade wheat futures contracts with three different expiration dates. Click HERE for more information.
Predefined Scans Triggered: P&F Double Bottom Breakdown, Elder Bar Turned Green, P&F Descending Triple Bottom Breakdown, New CCI Buy Signals and Entered Ichimoku Cloud.
WEAT is down -0.17% in after hours trading. It is beginning to bottom and curl back upward. It still needs to breakout of the trading range, but it is poised to do so given the positive indicators. The RSI is positive, rising and not overbought. The PMO surged above its signal line and Stochastics are rising strongly. It has been trading mostly in line with the market which works for now, but I'd like to see it start outperforming soon. This is low priced so position size wisely. The stop is set beneath the trading range at 6.3% or $5.53.
The weekly chart really makes me want to see a breakout above resistance. The weekly RSI is negative and the SCTR is in the basement. However, the weekly PMO is looking close to a Crossover BUY Signal. I would still keep this one in the short-term timeframe until it breaks out.
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 60% 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
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.
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