The market is uninterested in declining, although today it was helped along by the CPI report that indicated inflation measures are going in the right direction to imply a possible rate cut. At this point, I would hesitate to add new positions, but if added they should have stops.
I'm honestly not thrilled with today's selections as two of them are very market dependent and could see a downturn sooner rather than later. However, so far the rally is continuing so there is some upside potential.
I picked the Jr. Gold Miners ETF (GDXJ) which I do see as having more upside potential, but it has already run fairly high. I do own it and am looking for more upside.
Tomorrow is Reader Request Day so get those symbols in by noon tomorrow to ensure it will have a chance at being selected.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": ARKF, BLOK and GDXJ.
RECORDING & DOWNLOAD LINK (5/10/2024):
Topic: DecisionPoint Diamond Mine (5/10/2024) LIVE Trading Room
Recording & Download Link HERE
Passcode: May#10th
REGISTRATION for 5/17/2024:
When: May 17, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (5/17/2024) LIVE Trading Room
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Here is the latest recording from 5/13. 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.
ARK Fintech Innovation ETF (ARKF)
EARNINGS: N/A
ARKF is an actively managed fund of stocks related to financial technology innovation. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Green, New CCI Buy Signals and Entered Ichimoku Cloud.
ARKF is up +0.60% in after hours trading. We don't have a breakout yet, but we do see flat tops and then a small rising trend. That would be a bullish ascending triangle. The RSI has just entered positive territory. There is a new PMO Crossover BUY Signal. Stochastics are rising again and we can see that the fund is slowly beginning to outperform the market again. The stop is set beneath support at 7.5% or $26.14.
The weekly PMO is a problem and we do have overhead resistance arriving soon. We could still eke out a 13% gain if it at least makes it there, but I'm looking for a breakout. The weekly RSI is positive and the StockCharts Technical Rank (SCTR) is at the top of the hot zone* above 70. The chart isn't all bad, but keep this one in the short-term horizon for now.
*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 Transformational Data Sharing ETF (BLOK)
EARNINGS: N/A
BLOK is an actively managed portfolio mainly consisting of global equities focusing on blockchain technology. Click HERE for more information.
Predefined Scans Triggered: P&F Double Bottom Breakdown, Elder Bar Turned Green, P&F bullish Signal Reversal and New CCI Buy Signals.
BLOK is up +0.12% in after hours trading. This one is very similar to ARKF. I didn't realize the composition was so similar when I picked it. It is no wonder that the price pattern looks so similar. We have a reverse head and shoulders pattern visible that implies an upside breakout ahead. The RSI has moved into positive territory and there is a PMO Crossover BUY Signal. Notice that the OBV bottoms are rising to confirm and upcoming breakout. Stochastics have turned back up. It is just now beginning to outperform the SPY. The stop is set at 7.8% or $30.49.
As with ARKF, we have a not so good looking weekly PMO. There is also overhead resistance nearing, although it is further away than it is on ARKF. The weekly RSI is positive and the OBV is in a rising trend.
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: Moved Above Upper Bollinger Band and Moved Above Upper Price Channel.
GDXJ is up +0.11% in after hours trading. Gold Miners have been on fire. GDX would also be a vehicle that you could use. Gold is looking bullish again and that will help Gold Miners. The market is helping with its rally as well. It is not overbought based on the RSI so there is more upside potential. There is a new PMO Crossover BUY Signal well above the zero line. The OBV is rising strongly, confirming the rally. Stochastics are above 80 and it has really been outperforming the market. The stop is set between the 20/50-day EMAs at 7.4% or $41.11.
We have a breakout above very strong overhead resistance. The weekly RSI is not overbought yet. There is a weekly PMO Crossover BUY Signal and the SCTR is at the top of the hot zone. There is plenty of upside potential given this recent breakout. (I own GDXJ)
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 40% 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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Watch the latest episode of DecisionPoint Trading Room with Carl & Erin Swenlin Mondays on the DecisionPoint 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