The last few ETF Days have been very challenging. Today, given so many selections it wasn't very challenging at all. I have a long list of ETFs that I liked today. One interesting theme was international ETFs. I didn't find any that I wanted to present, but there were plenty. The Mexico ETF (EWW) and Canada ETF (EWC) made the first cut, but not the second. The charts are worth exploring.
I say that I have something for everyone as I have a highly leveraged 3x ETF (Retail - RETL) for those with plenty of risk appetite. For those that like to invest in sectors, I have one that I'm presenting (Energy - XLE) and one that made the first cut (Utilities - XLU). Finally, I have a Natural Resources ETF that should benefit from Energy's bullishness.
Tomorrow is Reader Request Day! I'm expecting to receive plenty of symbols given the character change in the market. Don't disappoint and bring them on!
Good Luck & Good Trading,
Today's "Diamonds in the Rough": GUNR, RETL and XLE.
Runner-Ups: EWC, EWW, FVD, FXU, IGF, INFL, LVHD, NFRA, NOBL, RLY, XLU and XRT.
** JULY VACATION **
I will be in Europe 7/14 - 7/27 so there will not be any Diamonds reports or trading rooms during that time. All subscribers with active subscriptions on 7/27 will be compensated with two weeks added to their renewal date.
RECORDING LINK (6/2/2023):
Topic: DecisionPoint Diamond Mine (6/2/2023) LIVE Trading Room
Recording Link HERE
REGISTRATION for 6/9/2023:
When: Jun 9, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (6/9/2023) 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 (6/5):
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.
Morningstar Global Upstream Natural Resources Fund (GUNR)
GUNR tracks an index of global companies that operate, manage or produce natural resources in energy, agriculture, metals, timber or water. Click HERE for more information.
Predefined Scans Triggered: P&F Double Bottom Breakout.
GUNR is down -0.91% in after hours trading. We saw a strong breakaway gap last week and today saw a continuation gap. The RSI is positive and the PMO just triggered a Crossover BUY Signal. Stochastics are just about above 80 and relative strength is gaining. I also spot a large double-bottom forming which is bullish. The stop can be set rather thinly at 5.7% or $38.33.
I'm not thrilled with the weekly chart so consider this one short-term in nature. The weekly RSI is negative (although rising). The weekly PMO is falling on a SELL Signal and just dropped below the zero line. However, it is decelerating its decline. The StockCharts Technical Rank (SCTR) is in the basement, far below our bullish "hot zone" above 70*. I have opted to put the upside target near all-time highs.
*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.
Direxion Daily Retail Bull 3x Shares (RETL)
RETL provides 3x exposure to an equal-weighted index of US retail stocks. Click HERE for more information.
Predefined Scans Triggered: P&F Double Bottom Breakout.
RETL is down -2.04% in after hours trading. This is a "juiced" ETF or leveraged 3x. This is high risk and you need to be comfortable with a very deep stop (it should be 3x what your normal level is). I've opted to set it thinly at 9.8% (or $5.75); "thin" for a leveraged ETF. Also note that this ETF is very low-priced which adds even more risk, so position size wisely--don't overcommit. The technicals are strong and makes this very enticing...I may consider adding a very small position. The RSI is moving quickly higher in positive territory. The PMO is on a clean Crossover BUY Signal (no twitch). I spotted a positive OBV divergence with price lows. Stochastics are rising in positive territory. Relative strength is building.
The weekly chart promises huge upside potential, but I wouldn't get too bullish. Still, the weekly PMO turning up is very positive. The weekly RSI needs work.
Energy Select Sector SPDR Fund (XLE)
XLE tracks a market-cap-weighted index of US energy companies in the S&P 500. Click HERE for more information.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Bollinger Band, Moved Above Upper Price Channel, Entered Ichimoku Cloud, P&F Double top Breakout and P&F Triple Top Breakout.
XLE is unchanged in after hours trading. I wasn't convinced about this sector earlier this week, but today's strong rally and the double/triple-bottom bullish chart pattern execution on the breakout above the confirmation line. The indicators are strong with the RSI rising in positive territory and the PMO Crossover BUY Signal that materialized this week. Stochastics are almost above 80 and relative strength is gaining. I've included the "Under the Hood" chart from our ChartList on the website named the same so we can see participation.
100% have price above their 20-day EMA with strong readings well above our 50% bullish threshold on %Stocks > 50/200-day EMAs. The Silver Cross Index just had a Bull Shift with its crossover above its signal line. The stop set above is 7.6% or $75.88.
The weekly chart is improving, but the weekly PMO still has work to do as it continues lower. The weekly RSI however is just about in positive territory and while the SCTR is below the hot zone, it is rising strongly and could reach it very soon. Upside potential is higher than listed. Consider a 16% upside target around $95.27.
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 20% long, 0% short. I'm contemplating adding an Energy position (EQT yesterday is a candidate) or XLE. May add RETL based on tomorrow's action.
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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