When the scans don't produce on an ETF Day, I rely on the DecisionPoint ETF Tracker. You'll find it under our ChartLists on the top of the lefthand side of the Blogs and Links page. It avails you the opportunity to sort through over 100 ETFs that cover most of the market. For those of you interested, I am happy to share the StockCharts ChartList for ease of use. Just send me an email and I'll get a link out to you.
I did manage to find one ETF from my scans, Residential Real Estate ETF (REZ) which is clicking right now. I'm a little concerned how it will handle rising interest rates so tread carefully.
The two other picks I gleaned from the ETF Tracker, Interest Rate Hedge (PFIX) and Wheat ETF (WEAT). You'll note on the ETF Tracker there are only a few that have rising PMOs and these two do.
I'm choosing to keep my exposure low right now and am about to let go of another position. I am considering PFIX as I do believe that interest rates are going to rise again.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": PFIX, REZ and WEAT.
Runner-up: DBA
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (8/2/2024):
Topic: DecisionPoint Diamond Mine (8/2/2024) LIVE Trading Room
Download & Recording Link
Passcode: August#2
REGISTRATION for 8/9/2024:
When: August 9, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine LIVE Trading Room
Register in advance for this webinar HERE
After registering, you will receive a confirmation email containing information about joining the webinar.
Below is the latest free DecisionPoint Trading Room recording from 8/5. 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.
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 Treasuries, and US Treasury Inflation-Protected Securities (TIPS). Click HERE for more information.
Predefined Scans Triggered: None.
PFIX is down -0.07% in after hours trading. Interest rates are back on the rise and this ETF will take advantage of this. We have a breakout back into the prior trading range. The RSI is currently negative, but that also means it isn't overbought. The PMO is making a turn back up and Stochastics are rising again. Not surprisingly, it is outperforming the SPY. The stop is set at 8% or $40.46.
With rates having fallen over the past months, it has given the weekly chart some problems. The weekly RSI is negative and the weekly PMO is still falling, although it is in oversold territory and appears to be decelerating the decline. The StockCharts Technical Rank (SCTR) is well outside the hot zone* above 70 and resides in the basement. All of this doesn't speak well for the intermediate term, but I still like its chances in the short term.
*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.
iShares Residential Real Estate Capped ETF (REZ)
EARNINGS: N/A
REZ tracks a market cap-weighted index of US residential, health care, and specialized REITs. Click HERE for more information.
Predefined Scans Triggered: P&F Ascending Triple Top Breakout, Elder Bar Turned Blue, P&F Double Top Breakout and New 52-week Highs.
REZ is up +1.88% in after hours trading, so maybe I should lift my confidence level. It made new 52-week highs although it did close off them. This is a good move toward a break above overhead resistance. The RSI is positive and not overbought which is good given it is at 52-week highs. The PMO is flat above the signal line which implies pure strength. It is in the process of a Crossover BUY Signal. Stochastics aren't that favorable, but they are holding in positive territory. Relative strength is going crazy. The stop is set halfway down the next trading range at 6.6% or $75.98.
The weekly chart shows us a strong rising trend pushing price toward the next level of overhead resistance. The weekly RSI is overbought, but I believe it could hold it a bit longer given the strength of this rally. The weekly PMO is rising strongly and the SCTR is at the top of the hot zone. I think we could get a breakout, but even a 15% gain would be nice.
Teucrium Wheat Fund (WEAT)
EARNINGS: N/A
WEAT tracks an index of wheat futures contracts. It reflects the performance of wheat by holding Chicago Board of Trade wheat futures contracts with three different expiration dates. Click HERE for more information.
Predefined Scans Triggered: P&F Double Bottom Breakdown and P&F Descending Triple Bottom Breakdown.
WEAT is down -0.10% in after hours trading. This is a reversal candidate. It is breaking out of a bullish falling wedge. The RSI is in negative territory as it has been beat down forming that falling wedge, but the PMO is now rising suggesting diminishing weakness or possibly new strength. Stochastics are rising in positive territory. Relative strength is working in its favor right now. The stop is set at 6.5% or $4.71.
An important item to note on the weekly chart is that price is coming off all-time lows. The indicators are terrible right now, but it is a reversal candidate so it has some bearish forces to overcome. If we can get to the 2024 high it would be an almost 30% gain.
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 considering adding PFIX.
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
(c) Copyright 2024 DecisionPoint.com
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