I found two interesting themes today. I didn't see a whole lot of scan results for ETFs, but what did come through were ETFs that were out of country. The other theme was 'dividend payers'. I took advantage of dividend payers and out of country with the Emerging Markets Dividend ETF (DEM).
The other out of country selections are France (EWQ) and the Asia 50 ETF (AIA). They are currently down in after hours trading, but do have nice setups.
I also found it interesting that two sector ETFs came up in the scans, Consumer Staples (XLP) and Financials (XLF). It tells us we may want to fish from these two groups.
Tomorrow is Reader Request Day so get those picks in before 1:30pm PT tomorrow.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": AIA, DEM and EWQ.
Runner-ups: EZA, FDL, GCOW, PEY, CGCP and DFCF.
RECORDING & DOWNLOAD LINK (3/1/2024):
Topic: DecisionPoint Diamond Mine (3/1/2024) LIVE Trading Room
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Here is the latest recording from 3/4. Click HERE to subscribe to the DecisionPoint YouTube Channel to be notified when new content is available.
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 Asia 50 ETF (AIA)
EARNINGS: N/A
AIA tracks an index of 50 of the largest companies from Hong Kong, South Korea, Singapore and Taiwan. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Green, Moved Above Upper Price Channel, P&F Double Top Breakout and P&F Triple Top Breakout.
AIA is down -2.60% in after hours trading so we'll see if this pick holds up, I want price to stay above support tomorrow. I liked the breakout from the prior trading range. The RSI is positive and not overbought. The PMO just surged above the signal line and there is a golden cross lining up for the 50/200-day EMAs. Stochastics are rising in positive territory. I'm looking for follow through on this breakout, but if it fails to produce, I don't think you need to wait for the stop at 5% or $55.94.
Price is still within a larger trading range on the weekly chart. The stop is only 5% so even a 12% move to the next level of resistance is acceptable, but should it get going, I don't see why we couldn't get further upside. The weekly RSI is positive and not overbought. The weekly PMO is rising on a Crossover BUY Signal. The StockCharts Technical Rank (SCTR) needs some help as it is outside the hot zone* above 70.
*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.
WisdomTree Emerging Markets High Dividend Fund (DEM)
EARNINGS: N/A
DEM tracks a dividend-weighted index of emerging market stocks ranked in the top 30% by dividend yield. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Green, New CCI Buy Signals, Moved Above Upper Keltner Channel, New 52-week Highs, Moved Above Upper Price Channel, P&F Double Top Breakout and P&F Triple Top Breakout.
DEM is down -1.11% in after hours trading. Like AIA, I really want to see support hold after this nice breakout. I didn't annotate it but it looks like this rally is coming off a bull flag formation. It could be ready to form another flagpole upward. The RSI is positive, rising and not overbought. The PMO has surged above the signal line well above the zero line. Stochastics are above 80 and rising. Relative strength is picking up on the recent rally. This stop could be tightened, but for now I have it at 5.9% or $39.73.
I like the weekly chart as everything is going right. We have a breakout to 52-week highs, a positive and not overbought RSI with a rising weekly PMO on a Crossover BUY Signal. The SCTR just reentered the hot zone above 70. Consider a 17% upside target to about $49.41.
iShares MSCI France ETF (EWQ)
EARNINGS: N/A
EWQ tracks a market-cap-weighted index of French companies. It covers the top 85% of French companies by market cap. Click HERE for more information.
Predefined Scans Triggered: Moved Above Upper Keltner Channel, New 52-week Highs, Moved Above Upper Price Channel and P&F Double Top Breakout.
EWQ is down -0.79% in after hours trading which would take back all of today's gains so we hope that it will hold up. There is a bull flag on the chart and today saw a breakout that confirms the pattern. The pattern would suggest a minimum upside target to about $43.00. The RSI looks good as it is positive and not overbought. The PMO looks a little suspect, but it is above the zero line and is holding onto a Crossover BUY Signal. Stochastics look very strong above 80. I've set the stop below the bottom of the flag formation at 6.6% or $37.83.
This is a good weekly chart. The weekly RSI is positive and not overbought. This is a nice breakout to new 52-week highs. The PMO is rising above the zero line on a Crossover BUY Signal. The SCTR is nearly in the hot zone. Consider a 17% upside target to about $47.40.
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 60% 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
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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