The ETF scans came up mostly empty, but I did find a candidate among the few results. ETFs like VIX Futures were heavy in today's results, but these are hedging vehicles and should be considered for only very short-term holds. I ended up doing a review of our ETF Tracker on the website (you'll see the list in the upper lefthand corner of the Blogs and Links page). Candidates were few and far between, but I did pick out two ETFs with the same general theme.
That theme was commodities/Crude Oil. I opted to include the Commodities ETF (GSG) and Oil Equipment & Services ETF (IEO). GSG will be affected by Oil prices as well as other commodities.
I was asked if there would be cancellations of the Diamond Mine trading room for the holidays. The Fridays don't land on holidays so I'm planning on hosting the Diamond Mine without fail this holiday season. The free DecisionPoint Trading Room will not meet on December 25th or January 1st, so our next free trading room will be January 8th.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": GSG, IEO and KRBN.
Runner-ups: CPER, BJK and XES,
RECORDING LINK (12/15/2023):
Topic: DecisionPoint Diamond Mine (12/15/2023) LIVE Trading Room
Passcode: December#15
REGISTRATION for 12/22/2023:
When: Dec 22, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (12/22/2023) 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 from 12/18:
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.
iShares S&P GSCI Commodity-Indexed Trust (GSG)
EARNINGS: N/A
GSG uses index futures contracts to gain exposure to a production-weighted index of front-month commodities futures contracts. Click HERE for more information.
Predefined Scans Triggered: None.
GSG is unchanged in after hours trading. I do believe we have a bearish engulfing candlestick here so you should be able to get a better entry if it declines as the pattern suggests it will. The RSI is not in positive territory, but it is close to net neutral (50). A rally or two will fix it. The PMO is on a Crossover BUY Signal. The OBV is confirming the rally and Stochastics are rising above net neutral (50). Relative strength is rising. I've set the stop at 5% or $19.29.
There is still a chance that price will go down toward support, but I'm counting on a reversal ahead based on the positive daily chart. Keep this short-term because we have problems on the weekly chart. The weekly RSI is negative and the weekly PMO is in decline. The StockCharts Technical Rank (SCTR) is not even close to the hot zone* above 70. Instead it is in the basement. Since our stop is thin, I'm making our upside target to the top of the long-term trading range.
*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.
iShares U.S. Oil & Gas Exploration & Production ETF (IEO)
EARNINGS: N/A
IEO tracks a market cap weighted index of companies in the U.S. oil and gas exploration and production space according to Dow Jones. Click HERE for more information.
Predefined Scans Triggered: Dark Cloud Cover, P&F Double Top Breakout, P&F Triple Top Breakout and P&F Quadruple Top Breakout.
IEO is down -0.25% in after hours trading. We're counting on Crude Oil to continue to reverse higher so if this trade starts to go south quickly, you won't want to hang around. The technicals are sound. The RSI is in positive territory and isn't overbought. There is a PMO Crossover BUY Signal and the PMO is rising. Stochastics are now above 80 suggesting internal strength. This ETF is beginning to outperform the market. The stop was easy to set beneath support at 6.5% or $87.49.
I spotted a bullish ascending triangle on the weekly chart. The weekly RSI is now back in positive territory and the weekly PMO is beginning to turn back up. The SCTR is improving quickly and should reach the hot zone in no time. Since it is near 52-week highs, consider a 17% upside target to around $109.49.
KFA Global Carbon ETF (KRBN)
EARNINGS: N/A
KRBN seeks to track a carbon credit futures index that weights holdings based on trade volume. The fund holds December futures from three major cap-and-trade programs. Click HERE for more information.
Predefined Scans Triggered: None.
KRBN is up +0.52% in after hours trading. This one drew my eye due to the strong rally and new PMO Crossover BUY Signal. The OBV is rising and thus confirming the rally. Stochastics are rising strongly in positive territory. The PMO is below the zero line, but I believe it is reflecting new strength, not just diminishing weakness. Relative strength line is rising. We can set the stop beneath support around 6.8% or $32.01.
Price bounced right off strong support and appears headed back to the top of the trading range. The weekly RSI is still negative, but the weekly PMO is attempting to rise again. It has been beat down on the prior decline as the SCTR is in the basement. Keep this one in the short-term timeframe until that weekly PMO actually turns up.
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 85% 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 3:00p 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