The ETF Scans really produced today, but most were just different versions of each other, primarily growth and large-cap ETFs or permutations of it. It came down to two things, a PMO sort and relative strength. Given so many looked like each other I decided to narrow it down with the sort and relative strength.
I primarily picked stocks off the PMO sort which put all of the highest PMO values at the top of my list. This is where one of the ETFs came from. Relative strength was important on narrowing down the list as well. You have plenty of other ETFs to explore in my runner-up list.
The market does seem to be making a comeback, but as I continue to say, keep those stops in play if you're going to venture out into the growth ETFs and stocks. I am still having trouble trusting the rally. This is why I didn't include CIBR or some of the other growth ETFs. Gold Miners look really interesting right now too which is why GDXJ is on the list. I just think it may be in for a pullback before it really takes off.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": ACWV, DFGR and EZA.
Runner-ups: REET, IAK, GDXJ, EWT, MTUM, DEM, MTUM and CIBR.
Diamond Mine Trading Room:
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Topic: DecisionPoint Diamond Mine (8/9/2024) LIVE Trading Room
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When: August 16, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine LIVE Trading Room
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Below is the latest free DecisionPoint Trading Room recording from 8/12. 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.
iShares Edge MSCI Minimum Volatility Global ETF (ACWV)
EARNINGS: N/A
ACWV tracks an index of large- and mid-cap global stocks selected and weighted to create a low volatility portfolio. Click HERE for more information.
Predefined Scans Triggered: New 52-week Highs, Moved Above Upper Price Channel and P&F Double Top Breakout.
ACWV is down -0.47% in after hours trading. This one isn't a growth ETF, but it does have some exposure in the area of Technology based on the holdings. It is a rather slow mover, but that offers us the opportunity to set a very low stop level. I had to pick it on the breakout. The RSI is not overbought and there is a new PMO Crossover BUY Signal. Stochastics are above 80 right now and we do see that in the intermediate term, it is outperforming. The stop is set at a very manageable level of 4.5% or $104.35.
The breakout looks solid on the weekly chart as it appears it is ready to start another leg up past resistance. The weekly RSI is overbought, but the weekly PMO is rising nicely so I'll accept it. The StockCharts Technical Rank (SCTR) also suggests this is a good investment as it is reading well within the hot zone* above 70. I don't know how long it would take to get there as it does move slow, but consider a 17% upside target to about $127.85.
*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.
Dimensional Global Real Estate ETF (DFGR)
EARNINGS: N/A
DFGR is actively managed to hold a diversified selection of US and foreign companies whose principal activities are engaged in the broad real estate sector, while focusing on REITs. Portfolio holdings are weighted by market capitalization. Click HERE for more information.
Predefined Scans Triggered: New 52-week Highs and Moved Above Upper Price Channel.
DFGR is unchanged in after hours trading. I like Real Estate right now. It was a rather easy pick for that reason AND it held the highest PMO value of all the ETFs I had narrowed it down to. There is a nice breakout to 52-week highs today. The RSI is not overbought and the PMO is on a Crossover BUY Signal. I also note that the PMO is flat well above the zero line which suggests pure strength. Stochastics are now above 80 and relative strength looks good in the intermediate term. I've set the stop below prior resistance at 6.5% or $25.33.
The breakout looks very nice on the weekly chart. The weekly RSI is overbought right now, but I expect it will get even more overbought given the bullish charts. The weekly PMO is rising almost vertically right now. The SCTR is at the top of the hot zone. Consider a 17% upside target to about $31.70.
iShares MSCI South Africa ETF (EZA)
EARNINGS: N/A
EZA tracks the performance of a market-cap-weighted index of South African stocks. It captures 85% of the publicly available market, excluding all small-caps. Click HERE for more information.
Predefined Scans Triggered: Parabolic SAR Buy Signals.
EZA is up +0.04% in after hours trading. I wish it had already broken out, but this is a strong rally and should see more followthrough. The RSI is not overbought and we have a new PMO Crossover BUY Signal. Stochastics are rising strongly toward 80. This one is showing excellent relative strength in the short and intermediate terms. The stop is set beneath support at 8% or $41.63.
Like I said above, it would be nice if we already had the breakout, but given the rising weekly PMO, I'm looking for that breakout. The weekly RSI is not overbought and we have a SCTR at the top of the hot zone. The upside target is double our stop level, but it could see a breakout above that level.
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 20% 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