Weekly Newsletter 07/24/09
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You are receiving this email because you are or were a BreakoutWatch.com subscriber, or have subscribed to our weekly newsletter. This newsletter summarizes the breakout events of the week and provides additional guidance that does not fit into our daily format. It is published each weekend.
Market Summary Weekly Breakout Report Top Breakout Choices Top 2nd Chances New Features Tip of the Week
Prior editions of this newsletter with our valuable Tips of the Week are available here.
 Weekly Commentary  

Special Market Rally Pricing Until July 31 - see below

Our equivolume charts provide an excellent visual summary of the state of the major indexes. Published daily in our Market Analysis section they convey at a glance the action for the day and the recent progress of the indexes. Learn more about equivolume charts here.

Our equivolume chart for the NASDAQ over the last 20 sessions shows clearly that more money is coming into the market from the sidelines and driving prices higher. The index closed higher on twelve consecutive days from July 9 until Thursday with seven of those days being accumulation days. (An accumulation day occurs when the volume exceeds that of the previous day). The price rises when demand exceeds supply so we can see from the width of the bars that demand is increasing each day. This can only happen if money is being redistributed from other sources into the market.

NASDAQ Equivolume

After such strong gains, it was not surprising that the index faltered slightly on Friday on profit taking but the white box on the chart shows that the index recovered almost all of its early losses. This shows traders and investors still found value in the shares comprising the index.

Special Market Rally Pricing

For those of you who have been on the sidelines and are thinking of dipping a toe into the market, and for those of you who have stuck with us through thick and thin (thank you!) we have a special offer open until July 31. If you subscribe, renew or upgrade and check the auto-renew box on the subscription page, we will increase the usual auto-renew discount from 5% to 15%. This is a gift that keeps on giving because every renewal thereafter will also get the 15% discount.

Current, returning or new subscribers are eligible for this deal so act today. You only have until midnight Eastern Time on July 31 to take advantage of this offer.

Bonus for Platinum Subscriptions

Tradewatch is now automatically included in the Platinum subscription - an extra $39.95 value. This allows Platinum subscribers access to our 'Sell Assistant' even though they may not be interested in our other Tradewatch watchlists. Take advantage of our special offer until July 31 to upgrade to Platinum and get the Sell Assistant, and other Tradewatch services, at an extra discount.

By the way, while we have been promoting the Zacks Strong Buy strategy lately, we failed to mention that Tradewatch has done quite well this year to date. Here are the summary results. Full details are available in the Tradewatch section of the site.

Buy On Breakout Buy at Open
Number of stocks Meeting Criteria: 38
Number of orders filled:
38
Number of failures at 8%: 7
Best Case Results:
Avg. gain/loss of positions to highest close:
28.88%
Avg. gain/loss including failures: 23.54%
Number of stocks Meeting Criteria: 37
Number of orders filled:
37
Number of failures at 8%: 15
Best Case Results:
Avg. gain/loss of positions to highest close:
20.71%
Avg. gain/loss including failures: 12.28%

Results for Positions Still Open

No. of Positions Open: 5
Avg. % Gain on Open Positions: 36.08
Avg. Open Period: 60 days

Results for Positions Still Open

No. of Positions Open: 7
Avg. % Gain on Open Positions: 26.84
Avg. Open Period: 28 days

Best Performance

VIT 89.9% gain to date

Best Performance

MEDX 99.4% gain to date
 New Features this Week Additional Value that we added this week
We've added the Sell Assistant to our 'Take Action' menu. This provides a convenient way to access the Sell Assistant without going through the Tradewatch menus.
This Week's Top Tip Tips for getting the most out of our site

Using The Sell Assistant

Sell Assistant

The Sell Assistant uses our Sell Model (see Sell Model Methodology) to determine if it thinks it is time to sell yet. By completing the form below and clicking the 'What's Your Opinion' button, we will produce a chart of the stock and if the Sell model thinks you should have sold it already, it will annotate the chart with the sell signal date and calculate a return based on the next day's opening price. Note that the Sell Assistant does not use a stop loss figure, but relies on its internal model to determine when to issue a sell signal. The Sell Assistant can be used for any stock, although it is only useful on stocks that were in a confirmed uptrend on the date of purchase.

Sell Assistant

If the Sell Model does not find a sell signal, you can click the 'Create Sell Alert' button and create a sell alert. You now have several options:

  • enter a stop loss figure either as a percentage or absolute value of your buy price
  • enter a trailing stop percentage, which will trigger an alert if the closing price falls by that percentage from the highest intraday price after the buy date
  • enter a target price which will trigger an alert when the stock closes above the target price
  • specify if the Sell Assistant is to use RS rank as part of the sell decision process. In this case, the RS rank must be less than the RS rank at purchase for the sell signal to be issued. Specifying 'No' is the more conservative approach, but strong performers will be allowed to run if you answer yes. Read this link for further discussion.
  • Override the Sell Assistant's default of sending an alert whenever any market signal goes to 'exit'

Create Alert

Use of the Sell Assistant is now available to all Platinum subscribers.

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 9093.24 3.99% 3.61% Down
NASDAQ 1965.96 4.21% 24.66% Up
S&P 500 979.26 4.13% 8.42% Down
Russell 2000 548.46 5.63% 9.81% Up
Wilshire 5000 10061.5 4.43% 10.72% Down
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Russell 2000
5.63 %
NASDAQ Composite
16.03 %
NASDAQ Composite
33.08 %
NASDAQ Composite
24.66 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Auto Parts Stores Auto Parts Stores Auto Parts Stores Auto Parts Stores
 Most Improved Industry (by change in technical rank2)
Aluminum
+ 54
Aluminum
+ 99
Long Distance Carriers
+ 213
Long Distance Carriers
+ 210
Charts of each industry rank and performance over 12 months are available on the site

1The Market Signal is derived from our proprietary market model. The market model is described on the site.
2The site also shows industry rankings based on fundamentals, combined technical and fundamentals, and on price alone. The site also shows daily industry movements.
 Weekly Breakout Report How confirmed breakouts performed this week
# of Breakouts
Period Average1
Max. Gain During Period2
Gain at Period Close3
This Week 19 16.15 8.86% 5.85%
Last Week 27 16.08 12.66% 8.61%
13 Weeks 187 17.77 21.19%
11.43%
1The average number of breakouts in each week over the previous 13 weeks.
2This represents the return if each stock were bought at its breakout price and sold at its intraday high.
3This represents the return if each stock were bought at its breakout price and sold at the most recent close.
 Top Breakout Choices Stocks on our Cup-and-Handle list with best expected gain if they breakout
Category
Symbol
Company Name
Expected Gain1
Best Overall RT RUBY TUESDAY INC 123
Top Technical GPRE Green Plains Renewable Energy 118
Top Fundamental TNDM Neutral Tandem 65
Top Tech. & Fund. TNDM Neutral Tandem 65
1This is the gain predicted by our Expected Gain model if the stock breaks out. Expected Gains for all cup-and-handle stocks are published on our site.
 Top Second Chances Stocks that broke out this week and are still in buyable range
Category
Symbol
Company Name
Expected Gain1
Best Overall CRNT Ceragon Networks Ltd 100
Top Technical IF Indonesia Fund 83
Top Fundamental PMCS Pmc-sierra Inc 93
Top Tech. & Fund. PMCS Pmc-sierra Inc 93
1This is the gain predicted by our Expected Gain model after the stock has broken out which uses the volume on breakout as a predictive term. Because the model variance is +/- 38% the expectation can be negative.

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