Mom is at peace now. Thank you again for your support through this difficult time. Remember that I will not be holding the trading room on Friday nor will I be publishing a Diamonds Recap.
The scans came up mostly empty, but two choices were worth a look today. PFIX which is the interest rate hedge is looking very good moving forward and the Dollar is in a nice rally. The third choice I picked from our ETF Tracker, REMX the Rare Earth Metals ETF.
Don't forget tomorrow is Reader Request Day. I could definitely use your help in uncovering symbols for review. Email them to me at erin@decisionpoint.com.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": PFIX, REMX and UUP.
RECORDING & DOWNLOAD LINK (3/29/2024):
Topic: DecisionPoint Diamond Mine (3/29/2024) LIVE Trading Room
Recording & Download LINK
Passcode: March#28
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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.
Simplify Interest Rate Hedge ETF (PFIX)
EARNINGS: N/A
PFIX is actively managed to provide a hedge against a sharp increase in long-term interest rates. The fund holds OTC interest rate options, US Treasurys, and US Treasury Inflation-Protected Securities (TIPS).
Predefined Scans Triggered: Elder Bar Turned Green, Moved Above Upper Bollinger Band, Moved Above Upper Price Channel, P&F Double Top Breakout and P&F Bullish Triangle.
PFIX is unchanged in after hours trading. With inflation data not coming in as desired, there is a high likelihood that we will see interest rates continue to rise. We don't have a breakout yet, but the chart is strong. The RSI is positive and not overbought despite today's gigantic move. The PMO is rising on a Crossover BUY Signal above the zero line. Stochastics are oscillating above 80 now. Relative strength is also improving. The stop is set at the 20-day EMA at 6.7% or $47.40.
Again, I would really like to see a breakout. Should we get the breakout we have pretty good upside potential. The weekly RSI is positive and not overbought. The weekly PMO is rising well above the zero line. The StockCharts Technical Rank (SCTR) isn't quite in the hot zone* but it is rising strongly.
*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.
VanEck Vectors Rare Earth/Strategic Metals ETF (REMX)
EARNINGS: N/A
REMX tracks an index of global companies that mine, refine, or recycle rare earth and strategic metals.
Predefined Scans Triggered: Elder Bar Turned Blue and P&F Double Top Breakout.
REMX is up +0.56% in after hours trading. Here is another one where I'd like to already see the breakout, but the chart is configured in such a way that we should eventually get that breakout. A rising Dollar could pose a problem, but it doesn't trace that closely to the Dollar. The RSI is positive and not overbought. The PMO is rising above the zero line on a Crossover BUY Signal that occurred above the zero line. Stochastics are rising above 80 and relative strength is rising. The stop is set arbitrarily at 6.8% or $50.19.
The weekly chart needs help. The weekly PMO looks great as it rises on a Crossover BUY Signal, but the rest of the indicators need some help. This reversal is coming off strong support, but I don't like the negative weekly RSI and dismal SCTR reading.
Invesco DB US Dollar Index Bullish Fund (UUP)
EARNINGS: N/A
UUP tracks the changes in value of the US dollar relative to a basket of world currencies via USDX future contracts.
Predefined Scans Triggered: Elder Bar Turned Green, New CCI Buy Signals, Moved Above Upper Keltner Channel, New 52-week Highs, Moved Above Upper Price Channel, Parabolic SAR Buy Signals and P&F Double Top Breakout.
UUP is unchanged in after hours trading. The Dollar has been rallying on a nice rising trend. After correcting somewhat, we got a strong gap up and breakout. The RSI is positive and not quite overbought. The PMO has surged above the signal line indicating pure strength. Stochastics have turned up in positive territory. Relative strength is beginning to improve. The stop can be very thin at just 3.6% or $27.56.
I like the weekly chart even though the SCTR is not in the hot zone. The SCTR is rising nicely so I'll take that. The weekly RSI is positive and rising. The weekly PMO is on a Crossover BUY Signal that occurred above the zero line. Consider a 17% upside target around $33.45.
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