In today's report, we will demonstrate a quick and simple strategy for advisors to identify new ideas to incorporate into their weekly routines for their clients. The aggregation of large datasets into manageable and actionable insights is a hallmark of the SIACharts platform. Let us explain how to accomplish this exercise so you can integrate it into your own practice. A favorite report at SIA can be found under "US ETF Industries" in the Reports tab. Here, you will find numerous reports covering various equity and bond ETF universes. One report that particularly excites us for its rich sector insights is the US Equity Specialty ETF Report. This extensive report includes 450 different ETFs and provides granular sub-sector intelligence on money flows at a high level. We can quickly utilize this report to identify top-ranked sectors and pinpoint sub-sectors that are moving up the ranks and on track to become the leaders of tomorrow. Additionally, we look for clusters of ETFs commanding the top favored zones or groups of similar ETFs moving together up the list. In yesterday's Daily Stock Report, we sifted through this list to compare consumer staples ETFs with cyclical/discretionary ETFs, which clearly favored the latter. During this exercise, we noted that new-age/online retail was gaining relative strength and warranted a deeper dive today. One standout was the Amplify Online Retail ETF (IBUY), currently positioned at #114 in the Neutral (Yellow) Zone of the report. It has moved up 145 relative strength positions in the past month and produced a 7.02% return for its unit holders. The ProShares Online Retail ETF (ONLN) is another name moving higher, currently at #19 and favored in the report. We reviewed the point and figure charts of both ETFs and found compelling recoveries, prompting us to dig deeper. The attached P&F chart of IBUY clearly shows a breakout, with unit prices approaching resistance levels at $70.30 and $77.61—representing a 10-20% price objective from current levels. The chart of ONLN is nearly identical, so if ProShares is your ETF preference, you can review it later. However, today’s Daily Stock Report will focus on plain vanilla stocks, so we will move to the next step of this exercise.
Next, we need to create a custom report under the portfolio tab with all the recent holdings in the Amplify Online Retail ETF. After a quick Google search and export of current holdings, we can simply cut and paste them into the "Add Symbol" box. The final step is to run a custom matrix, set at 6% on stocks. Voilà! We now have a ranked list of the top relative strength plain vanilla equities driving the performance of the IBUY ETF, which we have included above. Names like Carvana (up 262% YTD) and Sea Ltd (up 144%), highlighted in our Daily Stock Report on October 11th and included in the SIA 5-ADR research strategy, stand out. Other noteworthy mentions include Victoria's Secret, Hims & Hers, Revolve Group, Shopify, eBay, Expedia, and MercadoLibre—all of which have impressive charts and deserve review. Our primary focus is relative strength, and the power of the SIA platform in processing large datasets has essentially presented us with a dartboard full of 10-20s, eliminating all the 1-10s and ensuring that all our throws hit high numbers. If we must choose one name for this report, we highlight Uber Technologies, although it is only marginally better than the others. All these names carry high SMAX scores, show positive trending charts, and exhibit high relative strength compared to other market alternatives. In other words, these stocks are experiencing high levels of fund flows and represent the proverbial best of the best. To quickly zero in on Uber, we find a point and figure chart breaking out from long-term overhead resistance at the $64.27 level, which we have marked with a circle, calling it "the breakout." Further resistance can be calculated based on a vertical count to $99.36 and further up at $114.14, with support at the current 3-box reversal level of $78.35, long-term support at $63.01, and more at $57.07. UBER carries an SMAX score of 10 out of 10, further illustrating its relative strength against all other asset classes. We hope this exercise has been straightforward and can bring value to your practice in finding new ideas for client portfolios. We invite you to reach out to your SIA account managers if you would like further details on how to implement this best practice.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.
