I've arrived in Washington D.C.! Thank you for your patience in the delivery of tonight's report.
Tomorrow I could use your help! It is Reader Request Day. Since I'll be writing so late here on the east coast, I'd like to have a healthy selection of symbols to choose from so I can forego running my scans. Please email me some symbols that you find interesting or want to know more about.
I wasn't happy with the few results I got from my ETF scans, but I did scrape together three symbols with some promise. Still, I would be very careful about expanding your portfolio given market weakness is so visible.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": EWI, SLV and VRP.
RECORDING LINK (9/15/2023):
Topic: DecisionPoint Diamond Mine (9/15/2023) LIVE Trading Room
Passcode: Sept#15th
REGISTRATION for 9/29/2023**:
When: Sep 29, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (9/29/2023) LIVE Trading Room
Register in advance for this webinar HERE.
** There will be no trading room this Friday (9/22).
After registering, you will receive a confirmation email containing information about joining the webinar.
Here is the last recording from 9/18:
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 Italy Capped ETF (EWI)
EARNINGS: N/A
EWI tracks a market-cap-weighted index of Italian companies excluding small-caps. It covers the top 85% of Italian companies by market cap. Click HERE for more information.
Predefined Scans Triggered: Filled Black Candles, Parabolic SAR Buy Signals and P&F Double Top Breakout.
EWI is down -1.60% in after hours trading. I don't like today's filled black candlestick nor the action after hours, but I do like the bullish double bottom that is developing. The RSI is positive and the PMO had a positive crossover today giving it a BUY Signal. Stochastics are still in negative territory, but they are rising. Relative strength is picking up in a big way. You can set a more shallow stop on this if you prefer, I've opted to set it at the 200-day EMA at 5.5% or $30.06.
The weekly chart isn't altogether positive given the declining weekly PMO, but we do see the weekly RSI in positive territory and not overbought. The StockCharts Technical Rank (SCTR) is well within the hot zone* above 70 which does suggest it will resume or continue the current uptrend. Weak US markets could pose a problem though.
*If a stock/ETF 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 Silver Trust (SLV)
EARNINGS: N/A
SLV tracks the silver spot price, less expenses and liabilities, using silver bullion held in London. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Green, Parabolic SAR Buy Signals, P&F Ascending Triple Top Breakout, P&F Double Top Breakout and Shooting Star.
SLV is down -0.47% in after hours trading. I like Gold right now so it isn't a surprise that I like the Silver chart. We have Silver rising from the bottom of a trading range. The indicators aren't altogether ready, but they are improving. The RSI is negative, but nearing positive territory. The PMO is rising but isn't on a BUY Signal yet. Stochastics are rising, but they are still in negative territory. Relative strength is picking up. As with EWI, you could set a tighter stop, but I've chosen 5.2% or $20.23.
I'm not a fan of the weekly chart. The only positive is that the weekly RSI is approaching positive territory. This is a short-term play not an intermediate-term investment. The weekly PMO is in decline and the SCTR well below the hot zone. I've listed a modest upside target of 13.6%.
Invesco Variable Rate Preferred ETF (VRP)
EARNINGS: N/A
VRP tracks a market-value-weighted index of variable- and floating-rate preferred stocks. Click HERE for more information.
Predefined Scans Triggered: Stocks in a New Uptrend (ADX) and P&F Double Top Breakout.
VRP is up +1.15% in after hours trading which is really good given this is generally a slower moving ETF. This is a high yielding ETF. Today we saw an upside breakout above overhead resistance. The RSI is positive, rising and isn't overbought. There is a new PMO Crossover BUY Signal. Stochastics are already above 80 and relative strength has begun to pick up. I like that I can set a very thin stop at 3.7% or $21.74.
I like the weekly chart so this could be considered an intermediate-term investment. It would be best to get a more decisive breakout. The weekly RSI is positive and not overbought. The weekly PMO is rising and is not overbought. The SCTR looks excellent as it sits in the hot zone. Given it is nearing all-time highs, you could consider an upside target around 10% since the stop is thin, but a breakout to new all-time highs could spur price to move higher than that.
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% long, 2% 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 3:00p 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