Today I relied primarily on our ETF Tracker to find picks. The scans really didn't produce much in the way of results so I spent the afternoon eye-balling our ETF Tracker list. The list is available to StockCharts subscribers if you want it. I can send non-StockCharts subscribers the list of names in the Tracker so you can use your own charting tool.
I believe the stops on these ETFs are reasonable and not too deep. Yet the reward is excellent for the lower risk.
I will say that Bond funds look pretty good right now, we're just skeptical that rates are going to retreat much further and that of course is a primary indicator of what to expect performance-wise from Bonds.
Two of the ETFs I'm picking are very familiar, XLF and GDX. I have detailed "under the hood" charts for both and you'll see why I like what is going on under the surface.
There will be no Diamonds Report tomorrow which is why I gave you five picks yesterday and today. There will be a Diamond Mine trading room and recap on Friday.
Good Luck & Good Trading!
Today's "Diamonds in the Rough": GDX, IHF, MOO, SLX and XLF.
** SCHEDULE CHANGE **
Next week there will be no Diamond Mine on December 2nd and the Recap will go out on Saturday December 3rd.
TODAY'S RECORDING LINK (11/18/2022):
Topic: DecisionPoint Diamond Mine (11/18/2022) LIVE Trading Room
Start Time: Nov 18, 2022 09:00 AM
NEXT DIAMOND MINE Trading Room on November 25th 2022:
When: Nov 25, 2022 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (11/25/2022) LIVE Trading Room
Register in advance for this webinar HERE
After registering, you will receive a confirmation email containing information about joining the webinar.
Here is the last recording:
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.
VanEck Vectors Gold Miners ETF (GDX)
GDX tracks a market-cap-weighted index of global gold-mining firms. Click HERE for more information.
Predefined Scans Triggered: Stocks in a New Uptrend (Aroon), Moved Above Upper Price Channel and P&F Double Top Breakout.
GDX is up +0.07% in after hours trading. I know this was a recent "Diamond in the Rough", but you'll find that we will end up with repeats over time on ETF Day simply because there is a smaller universe. We have "under the hood" indicators on GDX so we know far more about the participation in this ETF. It is outstanding! Even the Golden Cross Index (GCI) is picking up speed. Today's small breakout and close above the 200-day EMA suggests follow-through ahead. Stochastics are also oscillating above 80 alongside a positive/rising RSI. The PMO is accelerating. The stop is set at 7.8% or $26.47.
There is still a declining trend showing overall and the weekly PMO hasn't quite confirmed on an intermediate-term investment. The SCTR is excellent at 89.8% meaning it has internal strength as far as trend and condition in all three timeframes.
iShares U.S. Healthcare Providers ETF (IHF)
IHF tracks a cap-weighted index of US companies that provide healthcare services. Click HERE for more information.
Predefined Scans Triggered: Moved Above Ichimoku Cloud.
IHF is up +3.88% in after hours trading. It is a thinly traded ETF but we do like the iShares version of industry groups. There is a bullish falling wedge that was confirmed today on the breakout. The RSI is in positive territory and the PMO is turning up just above the zero line. Stochastics are rising but below 80. Relative strength hasn't been good for the group, but it is improving now. The stop is thinly set below support at the November low around 4.1% or $260.34.
I wasn't thrilled with the trading range rather than a rising trend in the long term, but we do see a positive/rising weekly RSI and new crossover BUY signal on the weekly PMO. The SCTR isn't looking too healthy so consider this investment a bit more risky. Upside potential can be adjusted to 15% or $312.20.
VanEck Vectors Agribusiness ETF (MOO)
MOO tracks a market-cap-weighted index of companies that generate revenues from the agribusiness sector. Click HERE for more information.
Predefined Scans Triggered: Moved Above Upper Price Channel, P&F Double Top Breakout and P&F Triple Top Breakout.
MOO is up +0.01% in after hours trading. Today saw a tiny breakout above the November top. The RSI is positive and not overbought. The PMO has bottomed above the signal line and Stochastics are back above 80. Relative strength is improving somewhat but isn't quite what I'd like it to be. I still like the potential breakout and I particularly like that I only have to set up a 5.1% stop around $87.42.
We have a bullish double-bottom forming on MOO. The weekly RSI just moved into positive territory and the weekly PMO just had a crossover BUY signal. The SCTR isn't good and combined with somewhat suspect relative strength, we may not get the results we want. However, I added it because risk/reward is excellent. A 5.1% stop alongside a 19.1% target. Upside potential is great.
VanEck Vectors Steel ETF (SLX)
SLX tracks a market-cap-weighted index of global steel firms. For more information click HERE.
Predefined Scans Triggered: None.
SLX is unchanged in after hours trading. SLX is hovering above support at $58. It is due for a breakout move toward the June high. The RSI is in positive territory and the PMO continues to rise. It is not overbought as the bottom of its range is around -6, so the upper boundary would be +6. Stochastics are above 80 and have been most of November. Relative strength has been trending higher in November as well. The stop can be set thinly below support at 5.3% around $57.29.
We have a confirmed double-bottom pattern on the weekly chart. Interestingly the minimum upside target of the pattern would take price to the 2022 high. The weekly RSI is positive. The weekly PMO is on a BUY signal and just moved above the zero line. The SCTR is excellent at 93.6%.
Financial Select Sector SPDR Fund (XLF)
XLF tracks an index of S&P 500 financial stocks, weighted by market cap. For more information click HERE.
Predefined Scans Triggered: Parabolic SAR Buy Signals, P&F Double Top Breakout and P&F Triple Top Breakout.
XLF is up +0.14% in after hours trading. Today saw a close above resistance at the August top. The RSI is positive and the PMO is bottoming above the signal line. Notice the exceptional participation within the sector. Not only do we have a very high Silver Cross Index (SCI) reading, it is still rising. %Stocks > 20/50/200-day EMAs is above 70% or more. Stochastics are back above 80. If I had a complaint, it would be that relative strength is mostly flat. The stop can be set at 6.1% below the 200-day EMA or $33.79.
We have yet another double-bottom pattern on a weekly chart. In XLF's case, it has been confirmed with a breakout above the confirmation line (middle part of 'W'). The weekly PMO is rising on a BUY signal and is about to cross back above the zero line. The SCTR is excellent at 94.6%.
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 am 35% exposed.
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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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