A warm welcome to Santa as he makes his appearance for the market and for all the good little girls and boys today.
The scans were rather empty for ETF Day but the ones I've picked look fairly good. I still expect January to bring bad tidings so these picks and most any on the long side will be vulnerable so if you aren't going to have your finger on the pulse these holiday trading weeks, you may want to sit this out or set those stops to protect gains going into January.
I hope you all have a wonderful Christmas! There will be no trading room on Friday, but I'll be bringing Reader Requests to you on Thursday if I get any. If I don't, I'll see what I can scare up.
Good Luck & Good Trading & Merry Christmas,
Erin
Today's "Diamonds in the Rough": BIGT, BXSL and FXI.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (12/20/2024):
Topic: DecisionPoint Diamond Mine (12/20/2024) LIVE Trading Room
Recording & Download Link
Passcode: December#20
REGISTRATION for 1/3/2025:
When: January 3, 2025 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 12/23. 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.
Roundhill Magnificent Seven ETF (BIGT)
EARNINGS: N/A
BIGT is an actively managed fund that offers highly concentrated exposure to the largest and most liquid leading technology stocks. The fund invests primarily through swaps and forwards. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Green, Moved Above Upper Keltner Channel and Improving Chaikin Money Flow.
BIGT is up +0.05% in after hours trading. Given the mega-caps are leading the charge, it made sense to return to one of the Mag 7 ETFs. We now have a bull flag on the chart and a breakout in confirmation. The RSI is not yet overbought and the PMO has surged above the signal line well above the zero line. Stochastics are rising in positive territory and of course, this ETF has been outperforming the market. I've set the stop below the prior low at 7% or $54.01.
We have an excellent rising trend, but it is getting a bit parabolic so a correction does seem to be inevitable, but for now it just keeps making its way higher. The weekly RSI is overbought right now, but this ETF spends a lot of time in overbought territory. The weekly PMO is rising vertically on a Crossover BUY Signal well above the zero line. It is overbought as well so we do want to have stops set. The StockCharts Technical Rank (SCTR) is at the very top of the hot zone*. Consider a 17% upside target (if the market holds up in January) to $67.95.
*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.
Blackstone Secured Lending Fund (BXSL)
EARNINGS: N/A
Blackstone Secured Lending (NYSE: BXSL) is a business development company (BDC) that primarily invests in the first lien senior secured debt of private U.S. companies. Click HERE for more information.
Predefined Scans Triggered: New 52-week Highs, Moved Above Upper Bollinger Band, Stocks in a New Uptrend (Aroon), Moved Above Upper Price Channel, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
BXSL is up +1.94% in after hours trading. I note this one has a very nice yield. Today saw a strong breakout to new 52-week highs. The RSI is positive and not overbought. The PMO is on a new Crossover BUY Signal. Stochastics are rising above 80. This one has been performing very well based on the rising relative strength line. You don't need to set a deep stop on this one. I've opted to set it below the prior congestion area at 5.5% or $31.19.
The weekly chart shows a steady rising trend that is not parabolic. Price broke out after a correction and it hasn't really looked back. Despite the long rally, the weekly RSI is not overbought and the weekly PMO is rising on a Crossover BUY Signal. The SCTR is well within the hot zone. Consider a 17% upside target to about $38.62.
iShares China Large-Cap ETF (FXI)
EARNINGS: N/A
FXI tracks a market-cap-weighted index of the 50 largest Chinese stocks traded on the Hong Kong Stock Exchange. Click HERE for more information.
Predefined Scans Triggered: Entered Ichimoku Cloud.
FXI is up +0.10% in after hours trading. I feel less confident about this pick, but it does have some bullish indications. First is the large bullish reverse head and shoulders pattern that is developing. We also see that the RSI is back in positive territory and the PMO has given us a new Crossover BUY Signal. It is rather flat along the zero line which adds to neutrality of the chart. We do see a rising OBV that confirms the rally. Stochastics have turned back up and this one has been outperforming the SPY. I've set the stop below the November low at 7.9% or $28.63.
The weekly chart is mixed. Price corrected back below support at the 2023 high and is trying to recuperate. The previous decline put the weekly PMO is a bad configuration. Yet the weekly RSI is positive and the SCTR is in the hot zone. This one has an opportunity to get back to that prior high, but again, January could thwart it.
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
(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