In 2023, one of our best callouts and profitable swing trades was buying the Vietnam ETF (NYSE:VNM) on the lows and riding it to its peak in September 2023.
We did a hold-a-tail thought into the correction and finally exited in January 2024.
We have been aside since.
With the huge sell-off in equities, we revisit trades that trended well and that still have a fundamental story consistent with why we did the original trade.
However, like always, the charts say all.
One of my favorite patterns is the Island Bottom.
However, I like to see an Island bottom pattern confirmed on a second day.
Note the island bottom with the gap down to start the week, followed by the gap up on Tuesday.
The Leadership indicator shows VNM outperforming the SPY.
Yet, why we want a wee bit more patience is because our momentum indicator, or Real Motion, has yet to see the red dots clear back over the Bollinger band.
That would be a mean reversion signal if that happens tomorrow.
If you are wondering about risk, should VNM confirm the island bottom, (gap must hold), the risk is to be under Monday’s lows.
If you are more conservative, you do not want to see the gap filled thereby can use the highs from Monday as your guide.
ETF Summary
- S&P 500 (SPY) 540 resistance with 505 next support
- Russell 2000 (IWM) 210 resistance
- Dow (DIA) 380 support
- Nasdaq (QQQ) 430 support
- Regional banks (KRE) 50-52 support
- Semiconductors (SMH) 212 support 240 resistance
- Transportation (IYT) 61 support 63.50 resistance
- Biotechnology (IBB) 140 support
- Retail (XRT) 73 July calendar range low now near term support
- iShares iBoxx Hi Yd Cor Bond ETF (HYG) 77.00 now back to the nearest key support