--> Potential breakout trade in Private Equity ETF ($PSP)

Potential breakout trade in Private Equity ETF ($PSP)

market timing model: BUY

Current signal generated on close of November 13.

Portfolio exposure can be anywhere from 50 to 100% long. If positions are holding up well, then one can add exposure beyond 100%.

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:

  • $DZZ buy stop triggered. $PALL sell stop triggered.

stock position notes:

  • No trades were made.

ETF, stock, and broad market commentary:

Stocks finished in negative territory, but the percent losses were mild across the board. Small and mid-cap stocks held up best, as the S&P 400 and Russell 2000 closed in the top 20% of the day’s range.

Turnover increased on the NYSE, producing a bearish distribution day in the S&P 500, as it closed -0.3% lower.

Over the past two days, the small cap Russell 2000 has shown relative strength while the S&P 500 has struggled. This subtle shift (if it continues) could suggest that small cap stocks are ready to lead the market higher after taking a back seat to the S&P 500 and Dow in October and November.

Since stalling out at the prior highs of 2011, PowerShares Listed Private Equity ($PSP) has been consolidating in a tight range. If $PSP can clear the highs of 2011, then it could potentially run to $16 with little resistance.

$PSP BREAKOUT

On the daily chart, we see that a pretty tight range has developed above all the major moving averages. The action has tightened up nicely with higher lows in the base. The 20-day EMA has crossed back above the 50-day MA and both are trending higher. The 50-day MA is also above the 200-day MA with the 200-day MA in a clear uptrend.

$PSP can be purchased on a breakout above range highs, but we would prefer to buy a little early and anticipate the breakout following through. We are placing $PSP on today’s watchlist. Trade details can be found above.

$PSP breakout

We added one new position to the ETF portfolio in $DZZ. We stopped out of our 25% position in $PALL, which failed to hold on to prior swing lows.

On the stock side, we are adding two new setups in $LNKD and $SCTY. Both of these setups are A rated, meaning that we could potentially hold these stocks for several months if they continue to trend higher from our entry point.

With $SCTY, we are basically buying off support of the rising 50-day MA with a 10% stop. We will look to add to the position if the price action pushes higher.

$SCTY pullback buy to 50-day MA

With the $LNKD buy entry, we are taking advantage of a light volume dip below the 50-day MA. There two buy scenarios listed. One is a buy on strength, which is a buy stop order, and the other is a buy on weakness, a buy limit order. The idea is to set both orders up, but whichever order triggers fir

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