I discussed with you last Friday how I was unhappy with that week's picks. Most of them were in the negative. However, this week those "Diamonds in the Rough" have perked up with one position up over 14% and another up over 16%!
I hope to see this week mature similarly. It wasn't a bad week except that we did average lower on a week where the SPY was up the most on a week this year. It was a half and half kind of week. The Junior Gold Miners trade went south, but I still have a positive outlook for this industry group. I still own GDXJ.
This week's Sector to Watch had the best week of all of the sectors and I believe it will continue to move higher. Participation did pare back by the end of the day, but everything else looks good. We'll look at the Communication Services (XLC) chart.
The Industry Group to Watch was somewhat easy to select, Internet. Google (GOOGL) has been boosting this group, but I was able to find a slew of other symbols for your consideration: GDDY, NN, EVER, ENV and HEPS. Google still looks good too.
This week's "Darling" is the Homebuilders ETF. I have to say we did find that Building Materials were in the scan results this morning so it could see more follow through to the upside as these groups are somewhat related.
This week's "Dud" was down -2.77%, SiriusPoint Ltd (SPNT), we'll look at the chart and see if it has an opportunity to turn it around.
I ran a few scans to finish out the trading room and was able to find the following symbols as "Diamond in the Rough" material: EXP, TREX, BLDR, SLM, MHK and ODP.
Have a great weekend! See you in the free DecisionPoint Trading Room on Monday at Noon ET!
Good Luck & Good Trading,
Erin
RECORDING & DOWNLOAD LINK (3/22/2024):
Topic: DecisionPoint Diamond Mine (3/22/2024) LIVE Trading Room
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Topic: DecisionPoint Diamond Mine (3/29/2024) LIVE Trading Room
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Below is the latest free DecisionPoint Trading Room recording from 3/18. You'll find these recordings posted on Mondays to our DP YouTube Channel. Be sure and subscribe HERE.
A few items about the spreadsheet: I've put on the spreadsheet whether the RSI is positive (green) or negative (red). The PMO column tells you if it is rising (green) or falling (red). Finally I've added my own "Sparkle Factor" that gives you my assessment going forward, bullish (green), bearish (red) or neutral (gray). The Sparkle Factor is basically my thoughts on whether I expect it to rise or fall. A neutral means it could really go either way so it could be added to a watch list. If you're in a stock I consider "neutral" going forward, the ball is in your court.
Darling:
SPDR S&P Homebuilders ETF (XHB)
EARNINGS: N/A
XHB tracks a broad-based, equal-weighted index of US companies involved in the homebuilding industry. Click HERE for more information.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Keltner Channel, New 52-week Highs, Moved Above Upper Bollinger Band, Moved Above Upper Price Channel, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
Below are the commentary and chart from Wednesday, 2/20:
"XHB is up +0.35% in after hours trading. Price saw a nice breakout today that caught my eye. The RSI is not quite overbought in the short term. Notice the flat PMO above the zero line indicating pure strength. Today the PMO had a Crossover BUY Signal generate. Stochastics are rising again and are headed above 80. I really like the rising relative strength line that has been on the rise since January. The stop is set below support near the 50-day EMA at 7.4% or $100.41."
Here is today's chart:
Even with today's loss, the chart looks healthy and ready for more upside. Today is likely a pause in the action. The decline took the RSI out of overbought territory which is good. The PMO is beginning to put margin between it and its signal line. Stochastics are now above 80. I like Homebuilders moving forward.
Don't forget, on Thursdays I look at reader-requested symbols, so shoot me an email at erin@decisionpoint.com. I read every email I receive and try to answer them all!
Dud:
VanEck Vectors Junior Gold Miners ETF (GDXJ)
EARNINGS: N/A
GDXJ tracks a market-cap-weighted index of global gold- and silver-mining firms, focusing on small caps. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Green, Parabolic SAR Sell Signals, Moved Above Ichimoku Cloud, Moved Above Upper Price Channel, P&F Low Pole and Bullish Engulfing.
Below are the commentary and chart from Wednesday, 3/20:
"GDXJ is up +0.94% in after hours trading. Today saw a bullish engulfing candlestick on a huge rally that likely was spurred on by news from the Fed that could see the Dollar falter. The pullback was somewhat severe, but this is a good place for a rebound. We saw a breakout move today. The RSI is positive and not overbought. The PMO has surged or bottomed above the signal line. Stochastics are taking up residence above 80. Relative strength is kicking into high gear and should continue. I've set the stop at the 50-day EMA or $34.64."
Here is today's chart:
I am not thrilled about the pullback that occurred right after I picked this one, but ultimately I am holding my position as Gold Miners in general still look very bullish despite the decline. I doubt the stop will be hit before we see another rally pop. The PMO is looking suspect and I don't like Stochastics, but as I said, a look under the hood at GDX shows strong participation and upside potential. I've included GDX's chart below GDXJ.
THIS WEEK's Performance:
DecisionPoint Market Scoreboard (Mechanical Trend Model Signals): 
Click Here to view Carl's annotated "Under the Hood" ChartList!
Sector to Watch: Communication Services (XLC)
I will say I wasn't thrilled to see the loss of participation of stocks above their 20-day EMA, especially given today's followthrough on the earlier breakout from the trading range. This does cool my outlook compared to this morning. Still it isn't overbought like Materials (XLB) and Industrials (XLI) which would be runner-ups today. There is a new PMO Crossover BUY Signal and both the Silver Cross Index and Golden Cross Index are above their signal lines giving us a BULLISH IT and LT Bias. I would say there is room for improvement on this sector's participation. Stochastics are strong and we are seeing outperformance by the sector v. the SPY. Keep an eye on this sector.
Industry Group to Watch: Internet ($DJUSNS)
I like the breakout on this industry group. The RSI is positive and not overbought and there is a nice PMO Crossover BUY Signal well above the zero line indicating pure strength. Stochastics are above 80 and this group is outperforming the SPY by a mile. Symbols of interest: GDDY, NN, EVER, ENV, HEPS and GOOGL.
Go to our Under the Hood ChartList on DecisionPoint.com to get an in-depth view of all the sectors. On StockCharts.com you can find the Industry Summary.
Good Luck & Good Trading!
- Erin
erin@decisionpoint.com
Full Disclosure: I'm 65% long, 0% short.
Watch the latest episode of the DecisionPoint Trading Room with Carl & Erin Swenlin on Mondays 3:00p EST!
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
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 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 selection of "diamonds in the rough."
Helpful DecisionPoint Links:
DecisionPoint Shared ChartList and DecisionPoint Chart Gallery
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
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