I must say today's scans were filled with Bond funds. Most of them are slow movers, but I decided to include one for those who are more interested in fixed income type investments.
The other two picks are interesting. I have the Commodity Fund (DBA) and the Bull 3x for Real Estate. I like the shape of the charts. It's little early on Real Estate but I like its chances in either a bull market move or a possible bearish market decline given it is defensive in nature.
Tomorrow is Reader Request Day! I've not had many send in requests for some time so I would love for you to take a minute and send whatever symbols you are interested in. No worries if it isn't a complete fit to "Diamonds in the Rough". Reader Request Day is also there for you to learn what to look for and come to conclusions even if the chart isn't perfect. Give it a go! Send it to erin@decisionpoint.com!
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": AGGH, DBA and DRN.
Runner-ups: UITB, VCLT, SPIB, VFLO, JQUA, LRGF and IGV.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (3/28/2025):
Topic: DecisionPoint Diamond Mine (3/28/2025) LIVE Trading Room
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Passcode: March#28
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When: April 4, 2025 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 3/31. 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 Aggregate Bond PLUS Credit Hedge ETF (AGGH)
EARNINGS: N/A
AGGH is a fund-of-funds that seeks total return by providing exposure to US investment-grade bonds combined with several credit hedging strategies. The fund is actively managed. Click HERE for more information.
Predefined Scans Triggered: New 52-week Highs, Filled Black Candles, Strong Volume Gainers and Declining Chaikin Money Flow.
AGGH is unchanged in after hours trading. I chose this Bond fund because it has a breakout and is at new 52-week highs unlike most Bond funds. We also have a very large bullish double bottom on the chart. The RSI is positive and not at all overbought. We do have a bearish filled black candlestick, but I would look for higher prices in the near term if it does decline slightly. The PMO is relatively flat above the signal line and that implies pure strength in the move. We saw a very large amount of volume on today's small rally so interest is there. Stochastics are almost above 80. We can also see that AGGH is outperforming the SPY. That may not last if the rally gets going on the SPY, but we should see some upside regardless as yields are coming down. The stop doesn't have to be set deeply as this is a slow mover. I've set it below the 200-day EMA, but if it loses the prior support level, you could consider exiting then. The stop is 3.9% or $20.34.
This looks like a pretty good breakout to new all-time highs. The weekly RSI is positive and not overbought. The weekly PMO is rising on a Crossover BUY Signal above the zero line. The StockCharts Technical Rank (SCTR) is in the hot zone*. It'll take forever for it to reach my typical target of 17%, but here it is anyway, $24.77.
*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.
Invesco DB Agriculture Fund (DBA)
EARNINGS: N/A
DBA tracks an index of 10 agricultural commodity futures contracts. It selects contracts based on the shape of the futures curve to minimize contango. Click HERE for more information.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Bollinger Band, Stocks in a New Uptrend (Aroon), Moved Above Upper Price Channel, P&F Ascending Triple Top Breakout, Entered Ichimoku Cloud and P&F Double Top Breakout.
DBA is down -0.07% in after hours trading. I really liked the bullish double bottom on the chart and the strong rally above the confirmation line. The RSI is positive and not at all overbought. The PMO is on a new Crossover BUY Signal. Volume is picking up slightly on the OBV. Stochastics are rising very strongly toward 80. Relative strength has been rising near-term. The stop does not have to be set deeply. I chose 5.6% or $25.65 which is below support. A drop to that level would bust the bullish double bottom.
We have a strong intermediate-term rising trend with price bouncing off support. The weekly RSI is positive and not overbought. The weekly PMO is unfortunately in decline off that prior drop in price. The SCTR however is looking excellent at the top of the hot zone. Consider a 17% upside target to $31.80.
Direxion Daily Real Estate Bull 3x Shares (DRN)
EARNINGS: N/A
DRN provides 3x leveraged exposure to an index that captures large cap equities of the US real estate segment. Click HERE for more information.
Predefined Scans Triggered: Ichimoku Cloud Turned Green.
DRN is unfortunately down -5.81%. It is leveraged so we will see volatile moves. You may want to set a deeper stop or invest in the non-leveraged sector ETF (XLRE). It's early here as I would've liked to have seen price get above the 200-day EMA, but given the new PMO Crossover BUY Signal, I'm looking for that breakout. The RSI is just now in positive territory. Stochastics have also popped above 80. Relative strength is looking positive. I've set the stop beneath support on the prior price cluster, but as noted above, you may want to set it deeper given the leverage. I chose 7.6% or $9.70.
I thought it would be a good idea to look under the hood at XLRE to get a sense of participation and condition. The Silver Cross Index is above its signal line so there is a bullish bias in the intermediate term. Similarly the Golden Cross Index is above its signal line so there is a bullish bias in the long term too. Participation is healthy particularly the number of stocks above their 20-day EMA. We may not see a huge gain, but the leverage helps if we do.
Price is below resistance right now and the weekly PMO is in decline. Unfortunately the weekly RSI is also negative for now. It's awfully close to net neutral (50). There is plenty of upside potential if it can get back to its last high.
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 15% 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.
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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