NVDA is down in after-hours trading after reporting earnings that really seemed good, but they needed to be great. Currently it's down -5.66% as of writing this. I see this as a bellwether for the market as a whole and it doesn't speak well.
The scans may be telling us something as there were only a handful and they didn't look good at all. I'm not thrilled with today's picks so take them with a grain of salt. I hate going in saying that, but I had to do my picking by eyeballing our ETF Tracker. I have faith in my eyeballs, but would prefer to have scans to back up the picks.
Two of the selections could be listed as winners that should keep on winning. The first pick today is Copper (CPER) which is looking good for a reversal. Consider it a reversal candidate and with those come a little extra risk. With the Dollar in decline I do hold out hope for metals in general.
I have a few runner-ups as well. I hesitated to do KOLD as Nat Gas is sitting on lows and it is hard to imagine it will go that much lower. I think near-term it could be good. JETS looks pretty good, but if the market takes a turn for the worse I expect that area will struggle. Finally DBA is looking good but is a slow mover. Still it might be worth a shot.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": CPER, ITA and KRE.
Runner-ups: KOLD, DBA and JETS.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (8/23/2024):
Topic: DecisionPoint Diamond Mine (8/23/2024) LIVE Trading Room
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Passcode: August#23
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When: August 30, 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 8/26. 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.
United States Copper Fund (CPER)
EARNINGS: N/A
CPER tracks a rules-based index of copper futures contracts selected based on the shape of the copper futures curve. Click HERE for more information.
Predefined Scans Triggered: P&F High Pole and Elder Bar Turned Blue.
CPER is up +0.65% in after hours trading. It did pull back after hitting resistance today, but the technicals still look good and we are still seeing a rising trend. The PMO is below the zero line, but it is rising. The RSI is not overbought at all and is so far staying in positive territory. Stochastics have topped but are sitting comfortably above 80 for now. Relative strength is holding up, but admittedly it isn't outperforming the SPY. The stop is set at 6.5% or $24.57.
We're banking on a reversal of the declining trend and that is where some of the risk is. The weekly RSI is negative, but is getting close to positive territory again. The weekly PMO is in decline on a Crossover SELL Signal, but I do see slight deceleration which is welcome. As we would expect on a decline like it had, the StockCharts Technical Rank (SCTR) is well below the hot zone*.
*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 U.S. Aerospace & Defense ETF (ITA)
EARNINGS: N/A
ITA tracks a market-cap-weighted index of US manufacturers, assemblers and distributors of airplane and defense equipment. Click HERE for more information.
Predefined Scans Triggered: New 52-week Highs, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
ITA is up +0.61% in after hours trading. This one caught my eye on the breakout above resistance. The rest of the indicators are also in line with more upside. I like that despite the lengthy rally, the RSI is not overbought. The PMO is rising with a high reading above the zero line. Stochastics are curling lower a bit, but they remain above 80 for now. We can see relative strength is picking up. I've set the stop beneath support at 6% or $136.58.
The weekly chart is excellent although the weekly RSI has gotten overbought. So it may not be overbought in the short term, but it is in the intermediate term. Still we know in a good bull move, overbought conditions will persist and that could happen here. The weekly PMO is rising on a Crossover BUY Signal and we have a strong rising trend. The SCTR is at the top of the hot zone. Consider a 17% upside target to about $170.00.
SPDR S&P Regional Banking ETF (KRE)
EARNINGS: N/A
KRE tracks an equal-weighted index of US regional banking stocks. Click HERE for more information.
Predefined Scans Triggered: None.
KRE is down -0.30% in after hours trading. We have the "under the hood" chart for KRE so let's dive in. It is on a nice rising trend right now and appears ready to test overhead resistance soon. What I liked best was that the PMO only recently had a Crossover BUY Signal so this implies more upside to go. Participation is out of this world with the Silver Cross Index, Golden Cross Index and %Stocks > 20/50/200EMAs all above 94%. It is overbought for sure as far as participation, but those conditions can persist as we have seen previously. Stochastics are trying to turn up again above 80. Relative strength is rising against the SPY. I've set the stop beneath support at 7.6% or $52.88.
The weekly chart is strong, but we do have overhead resistance arriving soon. The weekly RSI is positive and not overbought and the weekly PMO is on its way higher above the zero line. The SCTR is at the top of the hot zone. It may stumble at overhead resistance coming up but if it breaks out there is plenty of upside potential.
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 35% 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