Breakoutwatch Weekly Summary 09/30/17

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Contents
New Features this Week Strategy Suggestions Breakouts Summary Breakouts Detail	Top Cup and Handle Chart Pattern Stocks Breakouts Index	Best Performing Index Best Performing Industry Most Improved Industry

Weekly Commentary
New Highs and Strong Breakouts The three major indexes all made new highs this week with the NASDAQ outperforming the others with a 1.1% gain despite a negative beginning on Monday. Wednesday produced an accumulation day as investors reacted positively to the budget framework that promised corporate tax cuts and by extension further improved corporate profits. Friday also produced an accumulation day as inflation fell, GDP growth for third quarter came in at 3.1% year-on-year and consumer spending rose 3.3%. The number of breakouts continued at a healthy level with cup and handle pattern stocks (21) delivering an average gain of 3.6% and Volatility Squeeze stocks (6) averaging 4.5%. High relative strength (RS) stocks performed well as I have continued to emphasis in my suggested strategy. While some lower RS stocks can occasionally outperform, such as MTRN (see below), they have a lower probability of success and are therefore a higher risk trade than those with an RS above our suggested minimum level of 94.

New Features this Week
The move to the new server did not proceed last weekend but will occur later today. Please advise me (mike@breakoutwatch.com) if you find anything is not working as before. Getting reliable real time data for the three major indexes has proved challenging over the last 2 weeks and so the major index chart displays on the alerts page has been either intermittent, missing or incorrect. I hope to have corrected that now.

Strategy Suggestions

Our latest strategy suggestions are here.

Relative Strength Rank Explained

RS Rank is a measure of a stock's price performance vs. all other stocks and ETF's in our database (currently 7494). The change in each stock's price for each of the previous four quarters is used to derive a weighted price performance for each stock, with the most recent quarter given the highest weight This weighted price performance is then used to rank all stocks against each other. Each stock is then given an RS Rank from 99 (highest) to 1 (lowest). A rank of 99 means that a stock is in the top 1% of all stocks on a price performance basis. This value is updated daily, so it is a dynamic indicator of relative performance against all other stocks given the latest closing prices.

In general, strong stocks remain strong. My analysis of cup and handle breakouts over more than 10 years of data shows that an RS rank over 90 (meaning that a stock is in the top 10% of price performance over the last year) tend to give the most breakouts, with those at or above an RS rank of 94 delivering the strongest performance. This week's breakouts illustrate the point:

Breakout Date	Symbol	Base	Breakout Price	RS Rank *	Current % off BOP
2017-Sep-26	HCM	SQZ	25.77	96	5.82%
2017-Sep-27	HCM	SQZ	26.61	96	2.48%
2017-Sep-27	AXTI	CWH	8.95	95	2.23%
2017-Sep-27	PLUS	CWH	88.85	95	4.05%
2017-Sep-29	MTLS	SQZ	13.92	95	4.60%
2017-Sep-27	ACLS	CWH	25.1	94	8.96%
Average Gain RS >= 94					4.69%
2017-Sep-27	ARRY	CWH	11.81	93	4.15%
2017-Sep-27	KE	CWH	21.2	92	2.12%
2017-Sep-26	IBP	CWH	60.08	91	7.86%
2017-Sep-26	PCOM	CWH	11.03	91	3.35%
2017-Sep-27	ITI	CWH	6.7	91	−0.75%
2017-Sep-27	BGCP	CWH	13.64	90	6.09%
2017-Sep-27	FBNC	CWH	33.39	90	3.05%
2017-Sep-29	WYNN	HTF	147.9	90	0.69%
Average Gain RS >= 90					3.91%
Average Gain RS >= 70					3.65%

Breakouts Summary by Watchlist for Week Beginning 09/25/17
List	Breakouts	Avg. Gain %
CWH	21	3.59
SQZ	6	4.5
HTF	1	0.69
HSB		0
DB	1	2.68
All	29	3.65

Breakouts Detail for Week Beginning 09/25/17
Brkout Date	Symbol	Base	Squeeze	BrkoutOut Price	Brkout Day Close	RS Rank^*	Last Close	Current % off BOP	Gain at Intraday High
2017-09-27	MTRN	SQZ	y	39.21	41	81	43.15	10.05%	10.74%
2017-09-27	ACLS	CWH	n	25.10	26	94	27.35	8.96%	9.16%
2017-09-26	IBP	CWH	n	60.08	62	91	64.8	7.86%	9.19%
2017-09-27	HUBS	CWH	n	78.00	80	80	84.05	7.76%	7.88%
2017-09-27	AMAT	CWH	n	48.53	49	87	52.09	7.34%	7.73%
2017-09-27	BGCP	CWH	n	13.64	14	90	14.47	6.09%	6.3%
2017-09-26	HCM	SQZ	y	25.77	27	96	27.27	5.82%	7.92%
2017-09-27	DHI	CWH	n	37.78	38	80	39.93	5.69%	5.9%
2017-09-29	MTLS	SQZ	y	13.92	15	95	14.56	4.6%	5.03%
2017-09-26	NCOM	CWH	y	41.00	41	82	42.8	4.39%	6.83%
2017-09-27	ARRY	CWH	n	11.81	12	93	12.3	4.15%	5.59%
2017-09-27	PLUS	CWH	n	88.85	90	95	92.45	4.05%	5.74%
2017-09-26	PCOM	CWH	n	11.03	11	91	11.4	3.35%	12.42%
2017-09-28	KIN	SQZ	y	7.61	8	84	7.85	3.15%	5.78%
2017-09-27	FBNC	CWH	n	33.39	34	90	34.41	3.05%	4.37%
2017-09-27	EWBC	CWH	n	58.17	58	84	59.78	2.77%	3.64%
2017-09-27	COLB	DB	n	41.01	42	74	42.11	2.68%	4.66%
2017-09-27	HCM	SQZ	y	26.61	27	96	27.27	2.48%	4.51%
2017-09-27	AXTI	CWH	n	8.95	9	95	9.15	2.23%	3.35%
2017-09-27	KE	CWH	n	21.20	22	92	21.65	2.12%	4.01%
2017-09-27	GIFI	CWH	n	12.45	13	87	12.7	2.01%	2.81%
2017-09-27	UVSP	CWH	n	31.45	32	81	32	1.75%	2.86%
2017-09-27	ESNT	CWH	n	39.90	40	87	40.5	1.5%	2.21%
2017-09-27	RBS	CWH	n	7.18	7	89	7.28	1.39%	2.65%
2017-09-29	MGPI	SQZ	y	60.10	61	87	60.63	0.88%	1.13%
2017-09-29	WYNN	HTF	n	147.90	149	90	148.92	0.69%	1.52%
2017-09-27	BAC	CWH	n	25.28	25	88	25.34	0.24%	1.42%
2017-09-27	CW	CWH	n	105.07	106	81	104.54	-0.5%	1.48%
2017-09-27	ITI	CWH	y	6.70	7	91	6.65	-0.75%	1.64%
^*RS Rank on day before breakout.

Top Rated Cup and Handle Stocks as of Friday September 29, 2017
Symbol	BO Price	BO Vol.	Company	Industry	RS Rank	Last Close
INTT	8.45	91,077	inTest Corporation Common Stock	Semiconductor - Integrated Circuits	96	8.30
AXTI	9.25	872,610	AXT Inc - Common Stock	Semiconductor - Integrated Circuits	96	9.15
GNBC	24.00	316,228	Green Bancorp - Inc. - Common Stock	Money Center Banks	95	23.65
MMSI	42.60	512,544	Merit Medical Systems - Inc. - Common Stock	Medical Instruments & Supplies	94	42.35
COHR	281.00	759,050	Coherent - Inc. - Common Stock	Scientific & Technical Instruments	94	235.17
FONR	31.20	56,838	Fonar Corporation - Common Stock	Medical Appliances & Equipment	93	30.50
MNTX	9.49	96,030	Manitex International - Inc. - common stock	Diversified Machinery	92	8.98
These stocks meet our suggested screening factors for our Cup and Handle Chart Pattern watchlist. See Revised Rules for Trading Cup and Handle Breakouts

Major Index Summary
Index	Value	Change Week	Change YTD	Trend¹
Dow	22405.1	0.25%	13.37%	Up
NASDAQ	6495.96	1.07%	20.67%	Up
S&P 500	2519.36	0.68%	12.53%	Up
¹The Market Trend is derived from our proprietary market model. The market model is described on the site here. ²The site also shows industry rankings based on fundamentals, combined technical and fundamentals, and on price alone. The site also shows daily industry movements.

Best Performing Index
1 Week	13 Weeks	26 Weeks	Year-to-Date
NASDAQ Composite	NASDAQ Composite 5.79 %	NASDAQ Composite 9.88 %	NASDAQ Composite 20.67 %

Best Performing Industry (by average technical score over each period)
1 Week	3 Weeks	13 Weeks	26 Weeks
Aluminum	Aluminum	Aluminum	Resorts & Casinos

Most Improved Industry (by change in technical rank²)
Diversified Computer Systems 80	Specialty Eateries 103	Manufactured Housing 210	Manufactured Housing 207
Charts of each industry rank and performance over 12 months are available on the site

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