Yesterday it was all about Consumer Discretionary, but today one sector popped back onto the radar and that is Consumer Staples. It's ETF Day so I have selected an ETF that will take advantage of any new strength in that sector.
The other theme today was international ETFs. They showed up last week and today many of them were in the scan results. I've picked one, but you'll find two more on the Runner-ups list.
The final pick is one that exploits an area I started to see making a comeback in yesterday's scans and that is Medical Devices/Supplies/Equipment. Today I have an ETF for Medical Devices (IHI).
Tomorrow is Reader Request Day! I have a few already, but I always like a healthy selection. Time permitting, I'll give you a quick read on your symbol even if it isn't included.
My appearance on Making Money with Charles Payne will be next week sometime. I'll give you notice!
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": EPOL, IHI and VDC.
Runner-ups: XLP, IEV, FTXG and EWQ.
** JULY VACATION **
I will be in Europe 7/14 - 7/28 so there will not be any Diamonds reports or trading rooms during that time. All subscribers with active subscriptions on 7/28 will be compensated with two weeks added to their renewal date.
RECORDING LINK (6/9/2023):
Topic: DecisionPoint Diamond Mine (6/9/2023) LIVE Trading Room
Recording Link
Passcode: June#8th (Sorry about mixing up the date in the password)
REGISTRATION for 6/16/2023:
When: Jun 16, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (6/16/23) 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 (6/12):
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.
iShares MSCI Poland Capped ETF (EPOL)
EARNINGS: N/A
EPOL tracks a market-cap-weighted index of the broader Polish equity market. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Green, Moved Above Upper Keltner Channel, New 52-week Highs, Moved Above Upper Price Channel and P&F Double Top Breakout.
EPOL is up +0.95% in after hours trading. Today it saw a doji candlestick, the epitome of indecision. Unfortunately they often times are reversal patterns and could indicate a decline tomorrow. This came on what looks like a breakaway gap after a mechanical pullback to new support and the indicators are very favorable. The RSI is in positive territory and isn't overbought. The PMO has surged above the signal line (hard to see so I added the thumbnail). The PMO is not overbought. Stochastics are above 80. Relative strength is trending higher. The stop is set at 6.4% or $17.73.
This can be considered an intermediate-term investment based on the bullish weekly chart. The weekly RSI is overbought, but given the robust PMO that "surged" earlier this year, rising OBV and StockCharts Technical Rank (SCTR) in the "hot zone" above 70*, I would look for more upside with potential at over 19%.
*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.
iShares U.S. Medical Devices ETF (IHI)
EARNINGS: N/A
IHI tracks a market-cap-weighted index of manufacturers and distributors of medical devices in the US. Click HERE for more information.
Predefined Scans Triggered: Filled Black Candlesticks.
IHI is unchanged in after hours trading. The only predefined scan triggered was bearish, but filled black candlesticks were everywhere today. This is due to a positive morning that saw many gains erased by the close. I'm ignoring it for now. It's a one-day pattern so a decline tomorrow wouldn't reverse the indicators. This could be considered a bullish double-bottom and today it was confirmed on a breakaway gap. The RSI is positive, rising and not overbought. The PMO just triggered a Crossover BUY Signal. Stochastics are about to move above 80. I note that relative strength is just now beginning to improve. The stop can be set thinly at 5.2% or $51.99.
At first glance it may appear that the weekly PMO is going in for a Crossover SELL Signal. In actuality it has surged above the signal line. The weekly RSI is positive and rising. The SCTR is outside of the hot zone, but is rising. I would consider this an intermediate-term trade with upside potential at 23%.
Vanguard Consumer Staples ETF (VDC)
EARNINGS: N/A
The fund tracks a market-cap-weighted index of stocks in the consumer staples sector of the US market. Click HERE for more information.
Predefined Scans Triggered: P&F High Pole.
VDC is down -0.35% in after hours trading. This is another option beside XLP. We have a bullish double-bottom combined with a newly positive RSI and a PMO that is going in for a Crossover BUY Signal. The double-bottom was technically confirmed intraday, but ultimately price closed beneath the confirmation line. If the pattern is confirmed and executes, the upside target of the pattern would take price to about $200. You can easily set a thin stop on this one, I've chosen 4.3% or $185.34.
This should be considered a short-term trade until the weekly PMO turns back up. In the meantime, the weekly RSI looks bullish, but the SCTR is terrible. The SCTR is making its way higher right now but is well outside the hot zone above 70. Given it is near all-time highs again, consider an upside target of about 16% to $224.65.
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 40% 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
Watch the latest episode of DecisionPoint Trading Room 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:
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
For more links, go to DecisionPoint.com