One of the themes today was Semiconductors. While I do think there is upside to be had, they are simply too overbought to be included in today's report.
Another theme were Bond funds, particularly corporate and municipal bonds. I was thoroughly unimpressed with upside potential on these funds, but if you have a favorite, you could consider it as yields are likely to continue moving lower.
I did manage to find three ETFs that do look to have potential in the short term. Biotechs are starting to break out and I found an ETF for nuclear energy that is doing well off the Uranium trade. Finally, I'm going back to the Robotics and AI ETF (BOTZ).
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": BOTZ, NLR and XBI.
RECORDING & DOWNLOAD LINK (7/5/2024):
Topic: DecisionPoint Diamond Mine (7/5/2024) LIVE Trading Room
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When: July 12, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (7/12/2024) LIVE Trading Room
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Below is the latest free DecisionPoint Trading Room recording from 7/8. You'll find these recordings posted on Mondays to our DP YouTube Channel. Be sure and subscribe HERE.
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.
Global X Robotics & Artificial Intelligence Thematic ETF (BOTZ)
EARNINGS: N/A
BOTZ provides market- cap selected and weighted exposure to companies involved in the development and production of robots or artificial intelligence. Click HERE for more information.
Predefined Scans Triggered: New CCI Buy Signals.
BOTZ is up +0.03% in after hours trading. We don't have a breakout yet, but I think we'll see one based on the indicators. The RSI is rising and is not at all overbought. The PMO looks particularly bullish giving us a Crossover BUY Signal above the zero line. We also see that Stochastics are rising above 80. Relative strength is about in line with the SPY which right now is acceptable. I've set the stop at the 200-day EMA, but if you choose to, you can exit when price exits the trading range. It is set at 7.3% or $29.37.
I like the weekly chart despite the weekly PMO is on a Crossover SELL Signal. It does appear to have flattened somewhat on this week's rally. There is a large bull flag with pennant that does imply higher prices. The weekly RSI is not overbought and the StockCharts Technical Rank (SCTR) is in the hot zone* above 70. There is plenty of upside potential.
*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 Uranium+Nuclear Energy ETF(NLR)
EARNINGS: N/A
NLR tracks a market-cap-weighted index of companies in the global nuclear energy industry. Click HERE for more information.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, Moved Above Upper Price Channel, New CCI Buy Signals and Rising Three Methods.
NLR is down -0.05% in after hours trading. This ETF is low in volume, but it tracks to a group of stocks so I'm not overly concerned. It shot up today on the rally in Uranium most likely. I am looking for follow through based on the indicators. The RSI is not overbought. The PMO is giving us a Crossover BUY Signal. Stochastics are rising strongly toward 80. We even see some outperformance against the SPY. I've set the stop below support at 7.1% or $78.44.
This is a nice bounce off strong support. The weekly PMO may be on a Crossover SELL Signal, but it is beginning to flatten on this rally. The weekly RSI is positive and not overbought and we do have a SCTR in the hot zone. This one could turn into a nice intermediate-term investment.
SPDR S&P Biotech ETF (XBI)
EARNINGS: N/A
XBI tracks an equal-weighted index of US biotechnology stocks. Click HERE for more information.
Predefined Scans Triggered: Moved Above Upper Bollinger Band, Stocks in a New Uptrend (Aroon), Moved Above Upper Price Channel and P&F Double Top Breakout.
XBI is down -0.03% in after hours trading. Today saw a nice breakout. It appears ready to head back to the top of the rising trend channel. The RSI is not overbought and the PMO is on a Crossover BUY Signal. It is flat above the zero line so there is internal strength in this rising trend. The OBV is rising to confirm this rally. Stochastics are above 80 and relative strength is just starting to be visible. I've set the stop outside the trend channel near the 200-day EMA at 8% or $87.84.
It is up against overhead resistance right now and the SCTR is not inside the hot zone yet. Other than that I like what I'm seeing. The weekly RSI is positive and not overbought. The weekly PMO is on a new Crossover BUY Signal. If it can make the breakout I think there is upside potential to about $120.
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 "Under the Hood" 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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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