Break Out With Relative Strength In Solar Energy ETF ($TAN)

market timing model: BUY

 Current signal generated on close of November 13.

Portfolio exposure can be anywhere from 75 to 100% long. If positions are holding up well, then one can add exposure beyond 100% (for experienced traders only).

Past signals:

    • Neutral signal generated on close of November 6.
    • Buy signal generated on close of September 9
    • Neutral signal generated on close of August 15
    • Buy signal generated on close of July 11
    • Neutral signal generated on close of July 5
    • Sell signal generated on close of June 24

 (click here for more details) 

today’s watchlist (potential trade entries):

$todays watchlist
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open positions:

Below is an overview of all open positions, as well as a report on all positions that were closed only since the previous day’s newsletter. Changes to open positions since the previous report are listed in pink shaded cells below. Be sure to read the Wagner Daily subscriber guide for important, automatic rules on trade entries and exits.

$todays watchlist
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closed positions:

open position summary
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ETF position notes:

  • Removed $FCG buy limit order for now. We will look to add on first pullback to the rising 10-day MA.

stock position notes:

  • $PGTI buy entry triggered on the open. Please see stock commentary below regarding holding $SYNA through earnings.

ETF, stock, and broad market commentary:

Note to new subscribers:

If you have recently signed up for our newsletter, then you will notice that there are quite a few open positions, with many of them in the money. The best way to approach establishing long exposure is to simply start small and build on success.

For example, if you have room for a maximum of 8 stocks/ETFs in your portfolio, it is best to establish 2-3 new positions (20-40% of portfolio value). If these positions move in the money fairly quickly, then you can add a few more.

One should never dive right into the market by establishing full exposure in just a few days. This is more along the lines of operating out of fear of missing a move, and one should never operate out of fear in the market. Take it slow and build on success!

In a near repeat performance of Tuesday in terms of percent gains, all major averages but the Dow Jones closed in positive territory. The Dow once again slid -0.3% lower, but is still trading in tight range above the 20-day EMA.

While the S&P 500 and Dow consolidate, the NASDAQ Composite, NASDAQ 100, S&P 400, and Russell 2000 continue to push higher after clearing prior highs.

In a recent report, we mentioned a potential pullback buy developing in Global X FTSE Greece 20 ETF ($GREK) after a base breakout to new highs in early January. The pullback looked constructive until Tuesday’s heavy volume selloff to the 50-day MA.

False breakouts are a big part of momentum trading, and we have seen plenty of stocks/ETFs recover to new highs after a quick shakeout to the 50-day MA. For the $GREK pullback entry to remain intact, the action must hold above the 50-day MA in the short-term. A breakdown below the 50-day MA would suggest that the base needs more time to develop.

$GREK flat base breakout and pullback

After a strong move off the lows of the base, Guggenheim Solar ETF ($TAN) pulled back to the rising 10-day MA on Tuesday and formed an inside day on Wednesday with light volume. The 20-day EMA has cleared the 50-day MA, and the 50-day MA has turned up after several weeks of trending sideways to slightly lower. These bullish signs suggest that $TAN is ready to resume its uptrend after a few months of rest.


If $TAN is unable to hold the 10-day MA over the next few days, then we could see a deeper retracement to the 20 or 50-day MA over the next few weeks.

However, if $TAN continues to ride its 10-day MA, then this three-day pullback might be all we get. As such, we are placing $TAN on today’s official watchlist. Trade details can be found above.

Current long ETF positions in $SEA and $SOCL are in great shape from our early entry points. $PKB is improving after clearing the prior high. $TBT is still in trouble and needs to hold the 200-day MA or our stop will trigger. Our short position in gold via the inverted gold ETF ($DZZ) is holding up at the 50-day M, but still has quite a bit of work to do to become a profitable trade.

On the stock side, we added $PGTI to the portfolio. $FONR just missed our entry point on Wednesday and remains a live setup.

We have one new setup in $NEO, which is a classic pullback trade after a big volume breakout. This is the first touch of the rising 10-day MA after an orderly, light volume pullback. A move above the two-day high should spark some buying interest and potentially kick the action back into trend mode.

Like $FONR, $NEO is a GONG setup (go or no go), which means that the stop is fairly tight with just a little bit of wiggle room.

$NEO is sized light because it is a cheap stock with low average daily volume. There is no need to get heavy. Also, just a reminder that traders should get heavier size in thick stocks like $SCTY or $LNKD, and trade light in the junk stocks. Traders with smaller accounts tend to do the opposite, and trade the cheaper stocks with big size and take little size on the more expensive stocks.

$NEO pullback entry

$SYNA reports earnings after the close on Thursday. If you do not wish to hold through earnings with us then exit the trade before the close. You can exit full or partial size (up to you and your comfort level).

We will hold through earnings because we have a solid profit buffer and the stock has had a few solid quarters of big earnings and revenue growth. The current breakout is also a move to all-time new highs, so $SYNA has plenty going for it. That being said, we have no guarantee that $SYNA will respond favorably to earnings. However, the odds look to be in our favor here, and that is what trading is all about.

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