The scans were very little help today for ETF Day. I noticed from our Scan Alert System that there weren't that many results to choose from in stocks either. The market is acting toppy. One thing I also noticed was that things weren't bearish enough to bring any inverse ETFs to forefront. Not a total surprise as today's decline was mild and we have been on a rally run.
However, with less results coming from our scans, we need to be ready for more market decline. I decided to go with a Materials theme and added our old friend Natural Gas (UNG) to the mix as well. Only Platinum ETF (PPLT) came from the scans today. UNG and Uranium (URA) are personal picks. We missed a lot of the run on URA but the spotlight has been put on it by the talk of Microsoft reopening Three Mile Island for AI computing power. Nuclear power is now becoming vogue again and that should keep URA elevated. We should be able to eke out more upside from URA.
Stops are a very good idea right now as the market is acting toppy. I still see excellent participation based on the Silver Cross Index and Golden Cross Index. In the final chart you can see that percentages are well above our 50% bullish threshold. The bull market doesn't appear to be in jeopardy yet.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": PPLT, URA and UNG.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (9/20/2024):
Topic: DecisionPoint Diamond Mine (9/20/2024) LIVE Trading Room
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Passcode: September#20
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When: September 27, 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 9/23. 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.
abrdn Physical Platinum Shares ETF (PPLT)
EARNINGS: N/A
PPLT tracks the platinum spot price, less trust expenses, using platinum bullion. Click HERE for more information.
Predefined Scans Triggered: Bearish 50/200-day MA Crossovers.
PPLT is up +0.11% in after hours trading. Notice the predefined scan that came through today. This alert was generated because it is a simple moving average not an exponential one. One good reason to use EMAs in my opinion as the chart is bullish but the Death Cross of the simple moving averages suggests otherwise. I saw a bull flag immediately on this chart. EMAs are configured positively and price broke out to confirm the flag. The RSI is positive and not overbought yet. The PMO is rising after surging above the signal line (bottom above the signal line). I like how Stochastics have turned back up and we do see some measure of relative strength against the SPY. I set the stop as close to support as I possibly could at 7.9% or $83.51.
We have a bull flag on the daily chart and we have a bullish falling wedge on the weekly chart. The weekly RSI is positive and not at all overbought. The weekly PMO is headed toward a Crossover BUY Signal. The StockCharts Technical Rank (SCTR) is not in the hot zone* yet, but it is headed there quickly. This has been in a trading range and it may stumble at overhead resistance coming up, but even that would be about a 13% gain. I'm looking for a breakout given the rally in Gold.
*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.
United States Natural Gas Fund (UNG)
EARNINGS: N/A
UNG holds near-month futures contracts in natural gas, as well as swap contracts. Click HERE for more information.
Predefined Scans Triggered: Filled Black Candles, Elder Bar Turned Blue and P&F Double Top Breakout.
UNG is up +0.63% in after hours trading. We have missed a lot of this rally, but it does look ready to make a breakout move to at least $18. We have a bullish double bottom and a new Silver Cross arriving which would trigger an IT Trend Model BUY Signal. The PMO is rising above the zero line so we have strength not diminishing weakness. Stochastics are above 80 and relative strength has been building. The stop is set beneath the 50-day EMA at 7.6% or $14.64.
Pric is coming off multi-year lows. The weekly RSI is nearing positive territory. The weekly PMO looks very good as it rises on a Crossover BUY Signal. The SCTR is not in the hot zone, but it is rising quickly. There is plenty of upside potential, but just remember it is still technically in a declining trend out of the 2022 high so be careful, be nimble.
(Full disclosure: I own UNG)
Global X Uranium ETF (URA)
EARNINGS: N/A
URA tracks a market-cap-weighted index of companies involved in uranium mining and the production of nuclear components. Click HERE for more information.
Predefined Scans Triggered: Stocks in a New Uptrend (Aroon), Stocks in a New Uptrend (ADX) and P&F Double Top Breakout.
URA is up +1.11% in after hours trading. We have a large bullish double bottom pattern that was confirmed with the breakout above the late August high. I wish I'd gotten in on this one earlier as the rally has been strong over the last five days of trading, but I see more upside based on the indicators. The RSI is not yet overbought, close, but not quite which is saying something given the rally. The PMO is rising above the zero line indicating strength. Stochastics are above 80 and volume is clearly coming in. Not surprisingly it is seeing great outperformance against the SPY. I set the stop beneath support at 7.9% or $26.59.
The double bottom is quite visible on the weekly chart. The height of the pattern tells us the minimum upside target would take it to the 2024 high. The weekly RSI just entered positive territory and the weekly PMO has turned up. We can also see that the SCTR is about to hit the hot zone above 70. If it reaches its "minimum" upside target for the double bottom pattern it would be a 17% 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 60% long, 0% short. I think I may go into the URA trade.
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)
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