Santa continues to bring good tidings to Wall Street, so I was surprised that I didn't have more selections come out of my scans. Of course the universe is much smaller for ETFs than stocks. I had four good results from my ETF scans.
The one ETF I didn't include was Uranium Mining ETF (URNM). I don't like the Uranium (URA) chart so I opted to leave that one out.
Hope your holiday season is going well! I'll be back tomorrow with Reader Request Day. Send in your symbols!
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": FTXG, TMF and VNM.
Runner-up: URNM.
** IMPORTANT **
I was asked if there would be cancellations of the Diamond Mine trading room for the holidays. The Fridays don't land on holidays so I'm planning on hosting the Diamond Mine without fail this holiday season. The free DecisionPoint Trading Room will not meet on December 25th or January 1st, so our next free trading room will be January 8th.
RECORDING & DOWNLOAD LINK (12/22/2023):
Topic: DecisionPoint Diamond Mine (12/22/2023) LIVE Trading Room
Passcode: December#22
REGISTRATION for 12/29/2023:
When: Dec 29, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (12/29/2023) LIVE Trading Room
Register in advance for this webinar LINK
After registering, you will receive a confirmation email containing information about joining the webinar.
Here is the last recording from 12/18 (no recording on 12/25 or 1/1):
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.
First Trust Nasdaq Food & Beverage ETF (FTXG)
EARNINGS: N/A
FTXG follows a liquidity-selected, multi-factor-weighted index of US food & beverage companies. Click HERE for more information.
Predefined Scans Triggered: P&F Double Bottom Breakdown.
FTXG is unchanged in after hours trading. We have a bull flag on the chart with the flag forming a bullish falling wedge. Both patterns have been confirmed with the breakout. The RSI is positive and not overbought. The PMO is now rising again and based on the lower bound of -3.0, we know it isn't overbought at 1.19. Stochastics are rising and are now above 50. Relative strength is about even with the SPY. If the market is going to take a breather, this ETF may still do well given it is in the defensive category. I like that you can set a thin stop of about 4% or $23.20.
The chart shows us that this ETF tends to travel sideways. It looks as though it is ready to make a move back up to the top of the range given the positive weekly RSI and rising weekly PMO on a BUY Signal. There is the problem of a StockCharts Technical Rank (SCTR) that isn't in the hot zone. In fact it is in the basement. Keep this short-term.
*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 20+ Year Treasury Bull 3x Shares (TMF)
EARNINGS: N/A
TMF provides 3x daily exposure to a market-value-weighted index of US Treasury Bonds with over 20 years to maturity. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Green, New CCI Buy Signals, Moved Above Upper Price Channel, P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
TMF is down -0.27% in after hours trading. I don't generally like presenting leveraged ETFs, but I think in this case it will work well. I see yields continuing to move lower so Bonds should continue on their rally. However, TLT can be a slow mover so leveraging 3x should provide excellent upside potential in the short term (keep it short-term as the RSI is overbought right now). The PMO has surged above the signal line (bottom above the signal line) and we have a breakout above the 200-day EMA. Stochastics are oscillating above 80. Relative strength continues to improve. The stop is set at 7.9% or $62.42.
Given this is leveraged, there is plenty of upside potential. I am not confident that it will make its way that high as rates will be due for a reversal soon. The weekly RSI is positive and not overbought. The weekly PMO is rising strongly on a Crossover BUY Signal.
VanEck Vectors Vietnam ETF (VNM)
EARNINGS: N/A
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: None.
VNM is down -0.55% in after hours trading. It seems to have hit overhead resistance and has turned down. However, the PMO has bottomed above the zero line and had a Crossover BUY Signal which signals pure strength. I see a breakout ahead. The RSI is positive and not overbought. Stochastics are rising strongly. Relative strength is beginning to pick up. I've set a thin stop at 5% or $12.17.
The weekly chart is developing. The weekly RSI just moved into positive territory. The weekly PMO has turned back up and the OBV is confirming the rally with its own rise. Unfortunately the SCTR is in the basement so keep this in the short-term timeframe.
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 85% 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 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