Yesterday I recorded The Pitch with Mary Ellen McGonagle and Mish Schneider. We each had to bring five trades to the table that we thought looked promising. I listed out their choices in the last DP Diamonds report. One of the trades discussed was the Vietnam ETF (VNM) which Mish presented. I had liked the chart, but today I really like the chart. It was included in my Momentum Sleepers scan today so I have marked up the chart the DecisionPoint way with our indicators.
The other two ETFs couldn't be much different. The Solar ETF (TAN) was one I presented yesterday on The Pitch. TAN is an aggressive ETF and can be quite volatile. The other is a low speed, low drag Yields Opportunity Fund (DLY) by Doubleline. The chart looks quite tasty and offers very little risk with modest upside potential.
In other news, I had an interview on The Final Bar with Dave Keller at StockCharts.com today. We discussed how my bullish outlook was left by the wayside after I saw our indicators, particularly the Swenlin Trading Oscillators.
Here is a link to The Pitch recording:
Here is a link to today's recording of The Final Bar:
Good Luck & Good Trading,
Today's "Diamonds in the Rough": DLY, TAN and VNM.
No runner-ups today.
RECORDING LINK (3/3/2023):
Topic: DecisionPoint Diamond Mine (3/3/2023) LIVE Trading Room
REGISTRATION for 3/10/2023:
When: Mar 10, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (3/10/2023) 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 (3/6):
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.
DoubleLine Yield Opportunities Fund (DLY)
The Fund will seek to achieve its investment objective by investing in a portfolio of investments selected for its potential to provide a high level of total return, with an emphasis on current income. The Fund may invest in debt securities and other income-producing investments of issuers anywhere in the world, including in emerging markets, and may invest in investments of any credit quality. Click HERE for more information.
Predefined Scans Triggered: New CCI Buy Signals.
DLY is up +0.56% in after hours trading. This one had a nice rebound after two days declining with the market. The technicals on the chart are quite favorable. The RSI is positive and the PMO is nearing a crossover BUY signal. Stochastics did tick down, but with that new PMO signal on tap, I believe it will continue higher. This one may not move that much, but it does have a solid 9.4% yield that makes it quite attractive for dividend investors. The stop can be set thinly at 4.1% or $13.80.
Since it does travel slowly, upside potential is somewhat limited. I've marked a 15% upside target, but it could struggle at the earlier resistance level. That would mean a 9.4% gain or so which is more than double out stop level so risk/reward is more manageable. I spy a large reverse head and shoulders on the weekly chart. The upside target of the pattern would definitely take price above our 15% upside target. The weekly RSI is positive, the weekly PMO just vaulted the zero line and the StockCharts Technical Rank (SCTR) is in the "hot zone"* above 70%.
*We call it the "hot zone" because it implies that the stock/ETF is in the top 30% of its "universe" (large-, mid-, small-caps and ETFs) as far as trend and condition, particularly in the intermediate and long terms.
Invesco Solar ETF (TAN)
TAN tracks an index of global solar energy companies selected based on the revenue generated from solar related business. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Blue and P&F Double Top Breakout.
TAN is down -0.45% in after hours trading. Price is clearly pulling back right now after a strong rally. This provides an entry opportunity given the PMO is rising on a BUY signal and the RSI is positive. It has been confined to a trading range which I'm not thrilled with and Stochastics did tick lower. This looks like a bull flag and relative strength is angling upward. The stop can be set around 7.7% or $72.31.
I talked about TAN being in a price range. It could work in our favor if price can test the 2022 top. The indicators are looking okay. The weekly RSI is positive, but mostly neutral. The weekly PMO is rising and nearing a BUY signal, but with the trading range it has flattened. The SCTR could use some help too. Consider this more short-term in nature.
VanEck Vectors Vietnam ETF (VNM)
VNM tracks a market-cap-weighted index of Vietnamese stocks. The fund covers companies listed or domiciled in Vietnam or that generate a majority of their revenues in Vietnam. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Green and Bullish MACD Crossovers.
VNM is up +0.09% in after hours trading. Today saw a small breakout above the mid-February low. It didn't quite make it above the 20-day EMA, but the breakout does look constructive. The RSI is rising, but hasn't quite left negative territory. The PMO appears to have just turned up today which is part of the reason it came through on my Momentum Sleepers scan. The OBV is confirming the rally. Stochastics are also in negative territory, but have turned back up. Relative strength is slightly better than the SPY right now. The stop is set below support at 6% near $11.03.
Given the thin 6% stop, upside potential is quite good at 15.5%. The chart itself needs work. The weekly RSI is negative and the weekly PMO is mostly flat (although it does look interested in turning up). The SCTR is terrible. This is a pick that is early, meaning the charts are just starting to look good, but it means some added risk so consider this one a short-term pick.
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 25% 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 2023 DecisionPoint.com
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.
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