It was not a good day for the ETF scans. They came up mostly empty. My third selection today came from me hunting and playing hide and seek with our ETF Tracker ChartList (available to members). One of the themes today was Bonds ETFs. While I do see interest rates weakening near-term, I don't feel confident enough about the upside potential of these funds. Feel free to fish from these ETFs, but know that falling rates are likely going to be short-lived.
The two ETFs that arrived in my scans were international ETFs, Germany (EWG) and Vietnam (VNM). Both look like they have upside potential. The third selection I made from the ETF Tracker is Marijuana ETF (MJ). I've been monitoring this chart since last week when a similar chart was brought to my attention on Reader Request Day. It looked good then and it looks good now.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": EWG, MJ and VNM.
RECORDING & DOWNLOAD LINK (3/22/2024):
Topic: DecisionPoint Diamond Mine (3/22/2024) LIVE Trading Room
Recording & DownloadLink
Passcode: March#22
REGISTRATION for 3/28/2024 (THURSDAY):
When: Mar 28, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (3/28/2024) LIVE Trading Room
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Here is the latest recording from 3/25. Click HERE to subscribe to the DecisionPoint YouTube Channel to be notified when new content is available.
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 MSCI Germany ETF (EWG)
EARNINGS: N/A
EWG tracks a market cap-weighted index of large- and mid-cap German companies. Click HERE for more information.
Predefined Scans Triggered: New 52-week Highs, Filled Black Candles, Moved Above Upper Price Channel and P&F Double Top Breakout.
EWG is up +0.25% in after hours trading. I don't like today's bearish filled black candlestick, but we do have a breakout nonetheless which I do like. This looks like a confirmation of a bull flag that could imply a move much higher. The RSI is not overbought and there is a brand new PMO Crossover BUY Signal. This is occurring well above the zero line. Stochastics are rising above 80. It has show relative strength against the SPY and that strength is beginning to pick up now. The stop is set beneath support at the December top around 5.4% or $29.87.
We have a bull flag that was confirmed on the weekly chart and a new flagpole is being created. The weekly RSI is unfortunately overbought, but I suspect it will stay that way based on the strong daily chart. The weekly PMO is rising above the zero line on a Crossover BUY Signal. The StockCharts Technical Rank (SCTR) is in the hot zone* above 70 implying internal strength in the intermediate and long terms. Consider an upside target of about 17% to $36.95.
*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.
Amplify Alternative Harvest ETF (MJ)
EARNINGS: N/A
MJ tracks an index of global firms engaged in the legal cultivation, production, marketing or distribution of cannabis, cannabinoids or tobacco products. The portfolio is weighted by market cap or equally based on a proprietary system. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Green, Moved Above Upper Keltner Channel and Moved Above Upper Bollinger Band.
MJ is up +2.01% in after hours trading. We've seen quite a rally out of the March low. Price closed above overhead resistance and we have a nearing Golden Cross of the 50/200-day EMAs which would put MJ in a bull market configuration. The RSI is positive and not yet overbought. The PMO is rising above the zero line on a Crossover BUY Signal signifying strength in the move. Stochastics topped but they remain above 80. We've seen very good relative strength from this ETF. The stop is set arbitrarily as there were now areas of support to go by. I opted to make sure I below yesterday's intraday low. This one is volatile so a deep stop is likely necessary. I've set it at 7.3% or $3.69. This is low priced so position size wisely.
The weekly RSI is positive and not overbought and the weekly PMO has surged above the signal line. We have a cup shaped base that has formed starting in 2023. Given the peak in the middle, this could be considered a stretched out double bottom. The SCTR is in the hot zone. If it can reach that previous peak, it would be a great 22%+ gain.
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: Elder Bar Turned Green.
VNM is down -0.28% in after hours trading. VNM has been enjoying a steady rally out of the October low which is why I found it attractive. This steady rally has caused the PMO to lay flat above the zero line implying pure strength. The RSI is positive and not overbought. Stochastics just reached above 80. Relative strength is in line with the market right now and that is acceptable for now. The stop is set beneath the 200-day EMA at 6% or $12.89.
The weekly chart is favorable. We have a positive and not overbought RSI and the PMO is on a Crossover BUY Signal that occurred above the zero line. The SCTR is rising strongly, but is still outside the hot zone for now. I think it may find some trouble at the next line of resistance, but ultimately I expect a breakout.
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
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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