I decided a week ago to try and focus on ETFs on Wednesdays, primarily using our ETF Tracker ChartList. This ChartList unfortunately is not resident on our site, but I am happy to share it with you either in list form or via StockCharts. If you'd like it, mail your request to firstname.lastname@example.org.
It was an easy task to find some great ETFs from that list. Many of the major index ETFs saw important breakouts with the small-cap ETF (IWM) looking especially promising. However, I opted not to present any ETFs associated with an index or sector. I've listed some of my favorites, along with others that I like in the "runners-up" list. Note that none of these were in my scan results, they simply have the characteristics that I like on a chart.
Send your symbol requests for me. Tomorrow is "Reader Request Day"! And, don't forget to sign up for the Diamond Mine trading room! Links to the recording and registration are below.
I did add GOLD to my portfolio today. Did you see yesterday's Renewable Energy "Diamond in the Rough" today? It was up over 24%! Looks like the spreadsheet will be very "green" this week!
Good Luck & Good Trading!
Today's "Diamonds in the Rough": KRE, REMX and XME.
Runners-up: IWM, TAN, GDX, LIT, PALL, URA and XLF.
RECORDING LINK (8/5/2022):
Topic: DecisionPoint Diamond Mine (8/5/2022) LIVE Trading Room
Start Time: Aug 5, 2022 09:00 AM
Meeting Recording Link
Access Passcode: August#5
REGISTRATION FOR Friday 8/12 Diamond Mine:
When: Aug 12, 2022 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (8/12/2022) LIVE Trading Room
Register in advance for this webinar HERE
Save the registration confirmation email with login instructions in case Zoom doesn't notify you in time.
StockChartsTV is now producing the recording for the free DP Trading Room! It airs at 3p ET, much sooner than I was able to get out the recording links. Carl has joined so you can "ask the master" all those questions you've always wanted his opinion on! If you haven't registered to attend live at Noon ET, you can do so HERE
Welcome to DecisionPoint Daily 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.
SPDR S&P Regional Banking ETF (KRE)
KRE tracks an equal-weighted index of US regional banking stocks.
Predefined Scans Triggered: Elder Bar Turned Green, New CCI Buy Signals, Moved Above Upper Keltner Channel, Moved Above Upper Price Channel and P&F Double Top Breakout.
KRE is down -0.15% in after hours trading. I've covered it three times before. Two of those times I didn't list stop levels for some reason, but I assume the positions eventually got stopped out. April 30th 2020, August 11th 2020 and September 30th 2021 (position closed).
Beautiful breakout today! XLF saw an IT Trend Model "Silver Cross" BUY signal today. This sector is waking back up. KRE has a positive RSI (albeit a bit overbought) and the PMO is accelerating higher. The OBV is confirming the rally and Stochastics are oscillating above 80. Relative strength is beginning to pick up for this group. The stop can be set rather thinly at 6.6% or around $61.32.
You can see the breakout above the 43-week EMA. The weekly RSI just moved into positive territory and the weekly PMO should print an IT crossover BUY signal on Friday if price continues moving higher. The SCTR just entered the "hot zone" above 70%. The "hot zone" is basically a bullish 70% reading or higher. It suggests new relative and internal strength. Upside potential is about 19%+.
VanEck Vectors Rare Earth/Strategic Metals ETF (REMX)
REMX tracks an index of global companies that mine, refine, or recycle rare earth and strategic metals.
Predefined Scans Triggered: P&F Double Top Breakout.
REMX is up +1.58% in after hours trading. I covered it on August 31st 2021 (position stopped out). I like this giant double-bottom formation. It hasn't been confirmed with a breakout above the May high, but given the indicators, I expect it to. The RSI is overbought, but we know if a stock or ETF is in a strong move higher, many times those conditions will persist. However, we do see that the last time it got overbought, it failed spectacularly. The PMO is rising strongly and isn't overbought just yet. Stochastics are oscillating above 80 suggesting internal strength. Relative strength is picking up. Notice the recent "Silver Cross" of the 20/50-day EMAs. That crossover generated an IT Trend Model BUY signal. The stop was relatively easy to set below support at 8.5% or around $94.58.
The double bottom is visible on the weekly chart. The weekly RSI just hit positive territory and the weekly PMO has recently turned back up. The SCTR is a healthy 97.4% which means that REMX is in the top 3% of ETFs based on the StockCharts Technical Rank formula. Upside potential is 24.5%.
SPDR S&P Metals and Mining ETF (XME)
XME tracks an equal-weighted index of US metals and mining companies.
Predefined Scans Triggered: Elder Bar Turned Green, Moved Above Upper Keltner Channel, Moved Above Upper Bollinger Band, Moved Above Upper Price Channel and P&F Double Top Breakout.
XME is -0.25% in after hours trading. I covered it on February 16th 2021 (position still open and up 41.08%). I've already been sending the alerts that Gold Miners were looking good so rather than present that chart yet again, I decided to cover XME which is looking excellent as well. Price broke out from a bullish falling wedge and after consolidating, it took off again. The RSI is positive and rising. The PMO just hit positive territory above the zero line. Stochastics are oscillating above 80 and relative strength is slowly improving. The stop is set at 6.5% or around $47.71.
The weekly chart is just beginning to improve. This bounce happened off very strong support and this week it is clearing overhead resistance. The weekly RSI just hit positive territory and the PMO has turned back up. The SCTR tells us that XME is also in the top 3% of ETFs. Upside potential is a little over 30%.
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 GCI/SCI 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'm 60% exposed to the market.
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 2022 DecisionPoint.com
Watch the latest episode of DecisionPoint with Carl & Erin Swenlin on Mondays 7:00p EST or on the DecisionPoint playlist on the StockCharts TV 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:
DecisionPoint Shared ChartList and DecisionPoint Chart Gallery
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
For more links, go to DecisionPoint.com