An ETF or Exchange Traded Fund is a bunch of securities that can trade in the stock market like a single stock. What this means is you get benefits of owning an individual share at the same time, it renders the advantages of an index tracking fund. Same as individual stocks, an ETF can be traded on a stock exchange, based on the US S&P500 index.  You will find lots of recommendations to buy ETFs at Company Invest.  In our opinion they are much, much better (and less expensive) than mutual funds.

An ETF, being a conglomeration of equities, and also called an equity traded fund, trading like a single stock, gives benefits like owning a single individual share at the same time, providing benefits that a collective investment vehicle would give. ETFs will track the performance of a bond, stock, or a commodity index. An example is the Gold ETF. Each Exchange Traded Fund, as with individual stocks, has a SEDOL and ISIN number, a ticker, and can be traded on the stock exchange. Since ETFs are listed securities, market prices rather than the NAV prevail during trading. The market price fluctuates in sync with the NAV, and with the demand and supply of the ETF shares.

The most common way to invest in ETFs is through brokers. It is similar to buying a normal share. ETFs listed on Stock Exchanges are eligible for inclusion in Self Invested Pension Plans and Individual Savings accounts. ETFs also attract dividends.

Same as in a normal fund, dividends are paid for the underlying investments of an ETF. It depends on the individual Exchange Traded Fund, if these dividends will accumulate to the fund or are distributed regularly.

The liquidity of the underlying stocks determines the liquidity of the equity traded fund. If the underlying stock is liquid, it becomes easier for the Market Makers or the Authorized Participants to facilitate trading by creating units. Therefore, even if the ETFs have low trading volumes, they may remain liquid.

Recently, short ETFs have developed, which move against the index, allowing speculation on price falls by private investors. Depending on private investor availability, equity traded funds can also be sold short. Therefore, in anticipation of falling prices, one can sell an ETF that he does not own.  The great thing about short ETFs is you will see Company Invest recommendations for them when signals are bearish on the charts.  That way you can make money when the market goes up AND down.

Since many stocks are making up one ETF, the owner gains diversified market exposure, thus spreading the risks. Mutual Funds can be traded only in day trading, or once a day, whereas equity traded fund are traded real time on stock exchanges. Therefore, ETFs are more liquid than Mutual Funds.

Information on the underlying securities of the equity traded fund is published daily, resulting into a transparency impossible with many other pooled investments. There being no load fee or stamp duty on ETFs, they cost less than similar Mutual Funds, and the cost efficiency of ETFs is higher. ETFs thus represent a low cost investment tool for many investors.  At Company Invest, we clearly like ETFs better.

There are certain risks involved with Exchange Traded Funds, which merit careful consideration before investment. The investor should review all associated documentation published by the equity traded fund provider and learn the risks involved with the investment. There may be tax implications, or exposure to currency risks for international ETFs. Risks after investment may be tracking error and bid offer spreads. Tracking errors include transaction costs and annual fees.

COMPANY INVEST BOTTOM LINE

ETFs are wonderful trading vehicles that offer low fees, less risk than individual stocks, and the opportunity to capitalize on hot sectors.  You can even profit when the market goes down by playing several bearish ETFs.  Watch for many Company Invest ETF picks in coming weeks.

Gold has been an impressive investment lately, but silver has been simply fantastic — in fact much better than gold. Consider over the past 4 months, the ETF “GLD” (which tracks the price of gold) has risen from $113/share to a high of $139.74 a share at the intraday high point today. That is a 23.66% gain, very nice!

However, if you had instead invested in the ETF “SLV” (which tracks the silver price), you would have enjoyed an amazing 71.75% gain in the same time period! Holy parabolic rises! The price of SLV rose from $17.48 to $30.02 from August through today. Should you buy SLV today? Absolutely not! This ETF is so overheated it is in desperate need of a pullback, and a significant one at that.

Perhaps the gold trade is just too overdone, or maybe it’s because silver has much more industrial and other practical applications than gold, but the silver freight train has been in high gear. However, before you get on that train, consider playing the pullback via the “ZSL” ETF. Technical analysis (the study of charts) is a strategy for trading, and the following chart is no exception:

COMPANY INVEST TECHNICAL ANALYSIS

“A” is our wonderful favorite momentum indicator, the 7-day RSI. Last time the RSI was in the oversold (brown) state and ticking up, the result was a nice 26% upside trade. This looks like another opportune time to get in for a trade. And at less than $11 a share, it’s affordable for all investors.

“B” is today’s daily candlestick price chart. Two important items of note here: #1 today’s candlestick is a “bullish piercing” reversal candlestick. Yesterday’s candle was a long red, followed by a gap down this morning with a close near or above the midpoint of yesterday’s candle. This is very bullish short-term. #2: Notice the 20 day moving average (red line). The last 5 times we had a reversal, ZSL rallied up to the 20 day MA. This gives us an immediate target of around $13.10 (figuring on a slight overshot of the line). That would be a nice 22% gain in two weeks time or less!

“C” is the MACD indicator. Look at the beautiful bullish divergence forming between the MACD (green line) and the price (blue line). Another powerful reversal sign.

“D” Finally, as confirmation of the above signals, the slow stochastics got a bullish cross today.

Company Invest Bottom Line: Grab the ZSL ETF here for a trade with a stop $1 less than your purchase price. Start out with a small number of shares (50-100) and add shares when the trade starts moving in your direction. You could also play DZZ here if you prefer to short gold instead.

Keep in mind: We expect the meteoric rise in silver to continue, so consider ZSL as only a trade. We’ll look to get back into SLV at some point down the line.

COMPANY INVEST UPDATE: This was written mid-afternoon, after which ZSL rallied hard and the candlestick was an engulfing candlestick. However, this is even more reason why this is a great trade.

I hope everyone had a great Thanksgiving.  Since we’re in the middle of a holiday weekend, I thought I’d include a piece about finding real estate investments.  Throughout the early 2,000’s the rage was flipping houses as the housing market just kept going up, up, up…  Now, we’ve had a subsequent crash, and with mortgage rates at record lows, now could be the time to think about real estate investing again.

 First, you must increase the odds by finding more deals. Who is more likely to get a cheap apartment building, an investor that simply looks through the listings, or the one that uses ten resources?  Here are the ten: 

1. Talk. Let people know you are looking and sometimes the properties will come to you. There are a lot of owners out there who want to sell, but haven’t yet listed their property.
2. Use the Web. Go to a search engine and enter the type of real estate you are looking for, along with the city you want to invest in. You never know what you might find.
3. Drive around looking for “For Sale By Owner” signs. Owners often don’t want to pay to keep the ad in the paper every week, so you won’t see all properties there.
4. Find abandoned properties. That’s a pretty clear sign that the owner doesn’t want to deal with the property. He might sell cheap.  Here is another option: 
5. Find old “For Rent” ads. Call if they are a few weeks old. Landlords are often ready to sell, especially if the haven’t yet rented the units out.
6. Talk to bankers. You might get a foreclosed-on investment property cheaper if you buy it before they list it with a real estate agent.
7. Offer someone a finder’s fee. There are people that always seem to hear about the good deals. Have such people coming to you.
8. SearchEviction notices. If your local papers publish eviction notices, or if you can get the information at the courthouse, it can be useful. A landlord who just went through the procees of evicting tenants is a likely seller.
9. Look for Old FSBO ads. If you call on two-month-old “For sale By Owner” ads, and they haven’t sold, they may be ready to deal. Owners often give up the effort, but still would love to sell. Help them out!
10. Advertise. “Looking for investment properties to buy,” might be sufficient to generate a few calls.

 REAL ESTATE INVESTING THROUGH ETFs

If buying real estate isn’t for you, you can still play the real estate sector using ETFs.  Here are a few to consider:

•  Cohen & Steers Global Realty Majors ETF (GRI)
• Direxion Real Estate Bear 3X – Triple-Leveraged ETF (DRV)
• Direxion Real Estate Bull 3X – Triple-Leveraged ETF (DRN)
• Dow Jones Wilshire REIT ETF (RWR)
• First Trust S&P REIT Index Fund (FRI)
• iShares FTSE NAREIT Industrial/Office Index Fund (FIO)
• iShares FTSE NAREIT Mortgage REITs Index Fund (REM)
• iShares FTSE NAREIT Real Estate 50 Index Fund (FTY)
• iShares FTSE NAREIT Residential Index Fund (REZ)
• iShares FTSE NAREIT Retail Index Fund (RTL)
• PowerShares Active U.S. Real Estate Fund (PSR)

TAKE ADVANTAGE OF ALTERNATIVE ENERGY PLAYS

The boom in alternative energy stocks has given rise to a boon in alternative energy ETFs. More than a half-dozen funds launched in the past few years, and more are on the way.

The newest wrinkle is funds that focus on specific technologies. Today’s Company Invest pick is “TAN,” an ETF that provides access to the solar energy market.   This fund offers exposure to the global solar energy market and a very inexpensive expense ratio of 0.65%.

We are always looking for pullback stocks to buy at Company Invest and TAN has experienced quite a correction here recently.  It is always better to buy stocks or ETFs when they are on sale, instead of grabbing them at the top of rallies.

IS “TAN” A BUY?  COMPANY INVEST TECHNICAL TAKE

The chart looks very favorable for a winning trade, or even a longer term investment right now in TAN.

“A” is the 7-day Relative Strength Index (RSI), a measure of a stock or ETF’s strength against its recent pricing.  The RSI is giving two buy signals: One it is sitting in oversold territory (20.88) that it hasn’t been in since the end of August.  The last time the RSI was this low, TAN gained 36%!   Also, the current RSI has a bullish divergence (higher low), while at the same time the price is making lower lows.  This is a powerful foreshadowing of a reversal.

“B” is the candlestick pricing chart of TAN.  It has corrected from $9 to the $7 range and a higher low (compared to the August low) looks to be setting up.  Today’s candlestick was a spinning top, which indicates indecision, and more importantly the selling occurred on very light volume.

“C” is the recent selling bars as TAN corrected.  Look at the massive selling peak that took place last week with those huge red selling bars.  Now contrast that with this week’s selling volume.  This tells us the selling may be over.

“D” is the MACD histogram, a wonderful predictor of momentum change.  There is a bullish divergence between the histogram bars and the price.  If TAN can get over $7.50 it will be extremely bullish, as that would confirm the histogram’s directional change.

“E” is the slow stochastic momentum indicator.  Yet another bullish divergence is setting up here.

Company Invest Bottom Line: Grab 100 shares here and put a stop at $6.77.  That way if TAN breaks the August lows, you are safely out.

If you just getting started with online trading and need a discount broker, consider Tradeking.  You can click their ad at the top of the page to fill out a quick and easy application, or, if you want to switch from a high cost broker to enjoy $4.95 a trade, .

MARKET STUTTERS DESPITE QE

Despite the implementation of Quantitative Easing (QE2) this week by Ben Bernanke and the Federal Reserve, there was a swift selloff in the market today.
Very few stocks closed in the green with the exception of Home Depot (HD) and some others in the retail sector.

Gold, oil, and most other commodities sold off hard as the dollar rallied fiercely despite the daily buying of US Treasuries by the Fed through Permanent Open Market Operations (POMO). Speaking of Quantitative Easing, for those of you who don’t know exactly what it is, check out the entertaining video below today’s trade update; it’s priceless!

COMPANY INVEST TRADE UPDATES

ERY: ERY is a triple levereged (3X) Bearish Energy Sector ETF. We suggested getting in last week and got stopped out. We then Re-entered the trade on Monday at $29.25. Since then, ERY has gained a nice 8.25%, closing at $31.67 today. What to do now? This trade is doing fantastic! We believe it has much upside to go. Hold your shares and look to add to your position on any slight pullback (possibly tomorrow). We put a 6% trailing stop in today. That way, worst case we’re still ahead on the trade.

QID: QID is the Technology sector Ultrashort ETF. We recommended QID in last weekend’s post for purchase on Monday morning. We got it at $12.60 on Monday and since then it has gone up nearly 5%, closing at $13.20 today — Not bad for two days! What to do now? Hold and buy more on a pullback (when the market bounces in the next trading day or two).

QE VIDEO

Despite Ben Bernanke and the Federal Reserve’s $600 billion effort to prop the stock market and economy, it looks as if a correction is in order now.  Now would be a good time to pause, take profits and sell a portion of your long positions, or, if you are aggressive, why not make money when the market goes down?   You can do that by shorting stocks, buying put options, or, our preferred method, buying inverse ETFs.

We know that the market goes down much faster than it goes up because fear is a powerful thing, especially when coupled with money.  Right now the early signals indicate a 5 to 10 percent correction looming in the S&P 500.  And when the S&P 500 goes down, 3/4 of all stocks go down with it so take heed.  If you want to stay in your long positions, that’s fine.  Use a 5 to 8% trailing stop (whatever you are comfortable with).  A trailing stop is a wonderful tool offered by most online brokers.  It is a variable selling point and is great when you’ve already made money and want to lock in your profits.  If you put a 5% trail in, your selling point is always 5% lower than the current bid for the stock or ETF you are in.  That way, if the price keeps going up, so does your stop, however, once it corrects 5%, your shares are automatically sold, and your profits are locked in.

Today’s pick is QID.  QID is a reverse ETF which moves in the opposite direction of the QQQ’s (technology ETF).  That is when the technology sector is going down, QID is going up.

Looking at the chart there are several encouraging signals:

“A” is the slow stochastic momentum indicator.  It has been oscillating in oversold territory since early September!  We think this time the stochastic line has a great shot of going all the way up to 80 (overbought).  If that happens, QID will rally bigtime!  There is a powerful divergence between the stochastic and the price channel.  Look at the severely downsloped price trendline (red), compared to the stochastic lows (green line).  The stochastic line is flat to slightly sloping upward, indicating a change in trend.

“B“is the price chart for QID.  We had a powerful white candle on Friday (typically a selling day) and QID had a positive week overall.  More importantly, are the 3 and 10 day Exponential Moving Averages (EMAs).  The green and red arrows in the chart indicate buy/sell signals generated when the 3 day EMA (blue line) crosses up or down through the 10 day EMA (red line).  As you can see this technique gives wonderful stock trading signals.  The last signal (SELL) occured at the beginning of September.  Since then QID has gotten a 36% haircut! As of Friday’s close the 3 day EMA is EXACTLY the same as the 10 day and is just about to cross to the upside.  Monday could be an EXCELLENT entry point.

“C” is the MACD histogram.  Look at the massive bullish divergence between the histogram and the price channel.  This is a powerful buy signal.

“D” is the ADX indicator.  You get a buy signal when the green line crosses up through the red line (heading that direction but hasn’t happend yet).  However, the ADX line (black line) gives early signals.  The ADX line measures trend, and the trend has been up since early September, however that line is now rolling over and sloping down.

Bottom Line: Look for an entry point Monday and buy 50-100 shares of QID with a stop $1 below your entry point.

UPDATE: We had two wonderful stocks here in X (US Steel) and DGP (Double Gold ETF).  Hopefully you took profits and sold all of your shares now.

ERY:  We recommended it last week, but our stop of $29.20 was triggered.  However, ERY rallied hard on Friday and we really like it again as a trade.  Look to re-enter on Monday.

At Company Invest,  we strive to provide analysis to give readers the most accurate forecast for the best stocks to buy based on recent chart signals.  We use technical analysis as our primary trading strategy.  For those who don’t know, technical analysis is the study of stock price charts.  We get signals from a variety of indicators including chart patterns, support and resistance levels, Japanese candlestick signals, moving averages, volume, and a variety of momentum indicators.

Before we get to the charts, on a macro level there are some interesting news events to consider.  With last week’s Federal Reserve decision to enact Quantitative Easing (QE2), many assumed, and rightly so, that the dollar would get trashed while commodities, especially precious metals would soar.  And that pretty much came true last week with gold hitting a new all-time high above $1,400 an ounce.  However, it seems to me this week (in a 180 degree reversal to that theory) that the Fed would like to strengthen the dollar.  There seems to be a sector rotation going on here that started yesterday and continued today.  The sector rotation appears to be a move out of gold, commodities, and treasuries and into stocks.

That brings us to today’s Company Invest pick, ERY.  ERY is a bearish Exchange Traded Fund (ETF) for the energy sector.  With what seems to be a coordinated effort to strengthen the dollar and with the dollar’s chart (UUP) looking quite bullish, the energy sector is setting up for a big correction.  And, by buying ERY, you can capitalize by making money when energy stocks go down.

COMPANY INVEST TECHNICAL ANALYSIS

Looking at today’s chart, “A” is the Relative Strength Index (RSI) set to the 7-day period.  At a reading of 10.44, the RSI is more oversold than it has been for at least 6 months (this entire chart).  This tells us a bounce is coming.

“B” is the ERY price chart.  Last Thurs, Nov 4 ERY gapped down pre-market and then continued to sell off throughout the day.  A “gap” occurs when prices move up or down outside of the trading session (in futures trading).  Technical analysis tells us that most of these gaps are eventually filled, meaning there is a very high probability that ERY goes back to the $34-$34.50 area in the near term.  That would mean over an 11% possible gain on a quick swing trade.  Also, yesterday’s candle was a hollow red candle, which indicates a reversal could be imminent.  The hollow red candle meant that ERY gapped down premarket yesterday, moved lower, then rallied the rest of the day to close higher than it opened, yet still lower (barely) than the previous day’s close.

“C” is the MACD histogram.  A shallower blue bar at the end of today’s session would indicate a reversal and a possible bullish divergence between the histogram and the price chart.  These bullish divergences happen when prices make a lower low, but the histogram makes a higher low (see sloping up green line on histogram and sloping down red line on price chart).

Finally, “D” the slow stochastic momentum indicator got a bullish cross (signal line “black” crossed up through the stochastic line “red”).

Company Invest Bottom Line:  This trade has a good risk reward.  You can buy it here and put a stop at $29.20, for a move to $34-$35.

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WHAT IS A MUTUAL FUND?

A mutual fund is an open-ended fund operated by an investment company, which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Mutual funds raise money by selling shares of the fund to the public, much like any other type of company can sell stock in itself to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments. In return for the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. Benefits of mutual funds include diversification and professional money management.

Our Take: Recent studies have concluded that the over 85% of mutual funds CANNOT beat the annual return of the S&P 500.  So much for professional money management.  In addition, mutual funds are expensive, with front end commissions and several “hidden fees,” that the average Joe has no clue about.  And your performance is dependent on the fund manager buying and selling the right securities at just the right time.  And fund managers do not get bonuses due to good performance; they get bonuses only based on the amount of dollars coming into the fund.  So all their efforts go into getting as many people to buy into their funds as possible.  Also, very few of the strategies on this site can be applied to mutual funds.

WHAT IS AN EXCHANGE TRADED FUND (ETF)?

An ETF is a fund that tracks an index, but can be traded like a stock. ETFs always bundle together the securities that are in an index. Investors can do just about anything with an ETF that they can do with a normal stock, such as short selling. Because ETFs are traded on stock exchanges, they can be bought and sold at any time during the day (unlike most mutual funds).

Their price will fluctuate from moment to moment, just like any other stock’s price, and an investor will need a broker in order to purchase them, which means that he/she will have to pay a commission. On the plus side, ETFs are more tax-efficient than normal mutual funds, and since they track indexes they have very low operating and transaction costs associated with them. There are no sales loads or investment minimums required to purchase an ETF.

Our Take:  We love ETFs.  ETFs charge a fraction of the fees of mutual funds and can be traded just like a stock.  And online broker’s offer very reasonable commissions ranging from $4 to $10 per trade.  Additionally, ALL of the trading strategies you read about on CompanyInvest.com can be used on ETFs.

MORE REASONS TO BUY ETFs

There are two main reasons we love ETFs at CompanyInvest.com:

#1: ETFs have much lower fees than mutual funds.  Over time this can be very significant.  Consider the following example:

Investor A has a portfolio of four of the leading mutual funds with an average expense ratio of 2.16% (Typical of a mutual fund portfolio).  He initially invests $1 million.  His  portfolio yields a 10% annual return.  After 30 years, his portfolio grows to $9.6 million.  Not bad right?

Investor B has a portfolio of four of the leading ETFs with an average expense ratio of 0.19% (Typical of an ETF portfolio).  He also initially invests $1 million.  Let’s assume his portfolio also yields 10% a year.  After 30 years, investor B’s portfolio grows to $16.5 million!

So over a 30 year period, with identical annual rates of return, Investor B has accumulated nearly $7 million more dollars than Investor A.  And that is ALL due to higher fund expenses and other fees over time.

#2 ETFs can be traded just like a stock. This means you can buy and sell them whenever you want, and you can also short them (and make money even when the market is trending down).

ALL of the strategies we suggest on Companyinvest.com can be used with ETFs; but very few with mutual funds.  Once you learn to trade and incorporate trading strategies such as the ones taught on this site, you can beat the S&P 500 100% of the time; not 15% like the mutual funds.

Bottom Line: Participate in mutual funds if your company offers a matching contribution to your 401k program.  But consider opening a ROTH IRA (all the major online brokers such as Scottrade, Etrade, Tradeking, and Sharebuilder) offer them.  You will get much more bang for your buck and if you use the strategies discussed on our site, your annual return can be more like 20% per year, instead of the 10% used in the example above.

In today’s environment where Central Banks are intervening, Quantitative Easing is the buzzword, currency manipulation is ongoing, there is much volatility in World currencies.  Should you trade currencies? How can you?  One way is to use ETFs.  The following is a short list of currency ETFs you can buy/sell:

• US Dollar                              UUP
• Australian Dollar               FXA
• British Pound                      FXB
• Euro                                        FXE
• Japanese Yen                      FXY
• Chinese Yuan                      CYB
• Canadian Dollar                 FXC

Forex Trading is another option.  Forex trading online is a fast way to use your investment capital to it’s fullest. The Forex markets offer distinct advantages to the small and large traders alike, making Forex currency trading in many ways preferable to other markets such as stocks, options or traditional futures. Here are seven reasons why you’ll want to look into Forex Trading online.

1 – Forex is the largest market.
Forex trading volume of more than 1.9 billion, more than 3 times larger than the equities market and more than 5 times bigger than futures, give Forex traders nearly unlimited liquidity and flexibility.

2 – Forex never sleeps!
You can execute forex trading online 24/7, from 7AM New Zealand time on Monday morning, to 5PM New York time on Friday evening. No waiting for markets to open: they’re open all night! This makes Forex trading online a very attractive component that fits easily into your day (or night!)

3 – No Bulls or Bears!
Because Forex trading online involves the buying of one currency while simultaneously selling another, you have an equal opportunity for profit no matter which direction the currency is headed. Another advantage is that there are only around 14 pairs of currencies to trade, as opposed to many thousands of stocks, options and futures.

4 – Forex Trading online offers great leverage!
You can make the most of your investment resources with Forex trading online. Some brokers offer 200:1 margin ratios in your trading accounts. Mini-FX accounts, which can typically be opened with only $200-300, offer 0.5% margin, meaning that $50 in trading capital can control a 10,000 unit currency position. This is why people are flocking to Forex trading online as a way to highly leverage their investments.

5 – Forex prices are predictable.
Currency prices, though volatile, tend to create and follow trends, allowing the technically trained Forex trader to spot and take advantage of many entry and exit points.

6 – Forex trading online is commission free!
That’s right! No commissions, no exchange fees or any other hidden fees. This is a very transparent market, and you’ll find it very easy to research the currencies and the countries involved. Forex brokers make a small percentage of the bid/ask spread, and that’s it. No longer any need to compute commissions and fees when executing a trade.

7 – Forex trading online is instant!
The FX market is astoundingly fast! Your orders are executed, filled and confirmed usually within 1-2 seconds. Since this is all done electronically with no humans involved, there is little to slow it down!

Forex trading online can get you where you want to go quicker and more profitably than any other form of trading. Check it out and see what Forex trading online can do for you!

Even though we’re still somewhat bearish on gold  right now at Company Invest, the chart signals are telling us the trade right now is to the upside.  We prefer to use DGP, which is a double gold ETF.

COMPANY INVEST TECHNICAL ANALYSIS

Looking at today’s chart, “A” is the Wilder’s ADX indicator.  Welles Wilder developed the Average Directional Index (ADX) to evaluate the strength of a current trend, be it up or down.  Low readings (below 20) indicate a weak trend and high readings (above 40) indicate a strong trend The ADX line (black line) measures this trend.  It has settled back to 24.39, after staying at an overhead level for a couple weeks. The other two lines on the indicator are the +DX (green) and –DX (red).  Buy and sell signals are generated in a trending market when a +DX/-DX crossover occurs . On 10/28 we had a bullish DI cross.  Confirmation of this buy signal occurs when the stock closes above the high point of the day of the crossover.  On 10/29 we got that confirmation with a close of $39.30. Buy signal firmly intact.

“B” is the daily pricing chart of DGP.  I prefer candlestick charts, because they have useful predictive qualities.  In this case, a red spinning top on Oct 27 (candle body has shadows extending both above and below it) indicated a temporary bottom.  Spinning tops occur on volatile trading days when the stock trades well above and below its opening and closing price throughout the day.  It marks investor indecision.  When this occurs following a multi-day trend, it suggests a pause or change in direction.

Secondly, I plotted this chart with 3 and 10 day Exponential Moving Averages (EMAs).  3 and 10 day EMA crossovers give wonderful buy signals.  Look at all the great signals on the chart when one line crossed the other. Today the blue line (3 day) crossed up through the red line (10 day).

Finally, as “C” shows, we had a confirmation of a bullish “PPP” pattern on the MACD histogram today. You can see this pattern on the chart. A higher low bar was put in yesterday, while today, 10/29 the stock closed higher than it did yesterday, confirming the signal. “PPPs” also give good, solid signals.

Company Invest Bottom Line:  Buy DGP Monday for a possible run into the $44-46 range.  Put a stop right below $37 (nearest support).  That way, you cap your potential loss