The scans were quite productive and came up with some good choices. One problem was that they all track the same as the majority were aligned with large-cap indexes, in particular the S&P 500. I opted not to include one as I found two other themes more interesting.
The first is Oil Equipment & Services. While I'm not certain Crude is ready to break out, this industry group is slowly making its way up and is showing new momentum.
The second is an ETF that tracks with the Internet Metaverse. I believe this will give us good exposure to the Technology sector which is performing well and seems to be leading the charge higher. It also takes advantage of some of the Magnificent 7 stocks that are leading the charge for the S&P 500.
I'm returning the final ETF; it was selected on December 20th. The Commodity Indexed ETF (GSG) tracks partly to Crude Oil, but also covers other commodities.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": GSG, IEZ and METV.
RECORDING & DOWNLOAD LINK (1/19/2024):
Topic: DecisionPoint Diamond Mine (1/19/2024) LIVE Trading Room
Recording & DownloadLINK
Passcode: January#19
REGISTRATION for 1/26/2024:
When: Jan 26, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (1/26/2024) LIVE Trading Room
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Here is the latest recording from January 22nd:
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: Moved Above Upper Bollinger Band and Moved Above Upper Price Channel.
GSG is down -0.10% in after hours trading. Today saw a tiny breakout above the December top. The 200-day EMA is nearing as more resistance, but the indicators are configured positively enough to look for a breakout. The RSI is positive, rising and not overbought. The PMO is nearing the zero line on a Crossover BUY Signal. Stochastics are well above 80 and still rising. We aren't seeing outperformance as of yet. I've set the stop below the December low at 6.7% or $19.37.
The weekly chart is maturing but is still reading somewhat bearish. The RSI is negative though rising. The PMO is rising again, but is still below the zero line. The SCTR is rising but is well below the hot zone* above 70. This looks like the beginning of a good rally. I've set upside potential to 29.2%. The next level of overhead resistance lies at the 2023 top which is about 11% away.
*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 Equipment & Services ETF (IEZ)
EARNINGS: N/A
IEZ tracks a market-cap-weighted index of domestic companies that are suppliers of equipment or services to oil fields and offshore platforms. Click HERE for more information.
Predefined Scans Triggered: Bullish MACD Crossovers and P&F High Pole.
IEZ is down -1.65% in after hours trading so a pullback may be on tap before it continues higher. It could offer a better entry. We have a bullish double bottom pattern. The RSI just moved into positive territory above net neutral (50) and the PMO is about to trigger a Crossover BUY Signal. Stochastics just moved above 50 and we can see outperformance is beginning to occur. I've set the stop beneath support at 7.1% or $19.64.
The weekly chart doesn't look good so keep this one short-term in nature. The RSI is negative and the PMO is in decline on a Crossover SELL Signal. The SCTR is in the basement at just 8.0. It tells us that it is only better than 8% of ETFs tracked in the SCTR universe. That's pretty awful. Should this double bottom turn into a good rally, I think we could see price back up toward the 2023 high.
Roundhill Ball Metaverse ETF (METV)
EARNINGS: N/A
METV is a passively-managed ETF investing in globally-listed equities spanning various industries, all relating to what it defines as a future iteration of the internet Metaverse. Stocks are selected by a committee and weighted in tiers. Click HERE for more information.
Predefined Scans Triggered: Moved Above Upper Keltner Channel, New 52-week Highs, Filled Black Candles and P&F Double Top Breakout.
METV is unchanged in after hours trading. Up front I realize there is a bearish filled black candlestick so it is vulnerable to a decline tomorrow, but I noted that most stocks and ETFs saw these candlesticks today as the SPY came off earlier highs to close beneath the open. Still this is a good breakout move and suggests more to come. The RSI is positive/not overbought and the PMO is nearing a Crossover BUY Signal. Stochastics are above 80. This ETF has been outperforming the SPY itself suggesting that these mega-caps truly are the catalyst to higher prices within the SPY. The stop is set beneath support at 7.3% or $10.79.
I do think this ETF has intermediate-term bullish characteristics so it could be a longer-term hold. It's an appealing ETF based on its composition. The weekly RSI is not overbought. The weekly PMO has surged above the signal line well above the zero line suggesting pure strength. The SCTR is at the top of the hot zone. I would set an upside target around 21%.
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 75% long, 0% short. Contemplating a position in METV.
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
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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