Weekly Newsletter 12/04/09
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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  
The NASDAQ Composite set a new intraday high for the year on Friday but ended the session just below its highest closing value for the year. The impetus for the new high came from the unemployment data for November which showed that payrolls fell by 11,000 in November 2009, the lowest monthly job losses since the recession began and the overall unemployment rate came down from 10.2 to 10%.

While unemployment is still high, the report showed that temporary employment rose by 52,000. This shows that employers are beginning to cautiously add workers and is a leading indicator for an eventual improvement in full-time employment.

For the week, the NASDAQ Composite gained 2.6% and the Russell 2000 rose 4.4%. There was also a welcome increase in volume as weekly volume rose to its best level in five weeks.

The higher volume levels allowed the number of successful breakouts to jump by 50% this week. These gained an average of 5.5% by Friday's close, comfortably outperforming the major indexes.

Star performer for the week was CAAS (China Automotive Systems) which broke out from a high tight flag pattern on Monday and gained 27.6% to its intraday high.

CAAS

 New Features this Week Additional Value that we added this week
The site now works with the Google Chrome browser. However, we still recommend the Firefox browser as being the fastest and providing the best set of features.
This Week's Top Tip Tips for getting the most out of our site
Breakout Choices for Busy Investors

Our Tradewatch service is designed for investors who are unable to monitor the markets in real time.

The service selects stocks that our research has shown are likely to perform best after breakout and suggests a price at which you should place a buy order.

Our 'buy on breakout' list has done particularly well this year. The service selects stocks for purchase at the next session if a specified price is reached. This allows you to place a "buy stop" order with your broker which will only be filled if the specified price is reached. This price is usually above the breakout price and our research has shown that stocks that reach the buy stop price after breakout usually have enough momentum to go on to make significant gains.

During 2009, forty-six stocks would have been bought in this way. If you then placed a stop loss order at 8% below your buy price, you would only have been stopped out on seven occasions. If you then held the stock until it reached its subsequent high, you would have made an average gain of 51.5%, including the 8% stop losses. The following table shows the Buy On Breakout stocks for the year so far in descending order of gain.


Symbol BoP
Buy Stop
Buy Date
Stop Loss
Date
Gain to High
TYH 60.93 62.45 04/02/09
172.47%
VIT 7.57 7.76 04/28/09
165.34%
PEGA 14.76 15.13 02/13/09
130.87%
ROVI 15.6 15.99 02/27/09
115.76%
HMIN 17.81 18.26 08/04/09
104.27%
SFLY 9.61 9.85 03/31/09
79.80%
MELI 29.65 30.39 07/24/09
79.17%
NTES 25.75 26.39 03/31/09
78.10%
LL 14.6 14.96 04/22/09
75.87%
ALGN 10.07 10.32 04/22/09
71.51%
SNDA 36.98 37.9 03/24/09
67.97%
SMSI 7.44 7.63 04/17/09
67.23%
RHB 17.44 17.88 03/17/09
62.70%
TNDM 21.09 21.62 03/13/09
53.75%
RSX 21.36 21.89 05/22/09
46.60%
WMS 33.46 34.3 05/05/09
42.51%
CDE 16.68 17.1 09/03/09
42.05%
WLK 19.68 20.17 05/05/09
39.71%
HDB 98.83 101.3 05/27/09
37.12%
RCL 18.07 18.52 08/20/09
35.48%
ODSY 11.19 11.47 02/20/09
33.83%
STNR 30.95 31.72 04/30/09
32.31%
EC 22.28 22.84 05/29/09
31.35%
ICE 91.43 93.72 05/05/09
27.76%
CPA 40.86 41.88 06/25/09
27.10%
WPI 29.43 30.17 02/19/09
25.79%
EHTH 15.78 16.17 03/18/09
18.68%
ICUI 36.31 37.22 04/29/09
18.08%
LKQX 16.74 17.16 04/30/09
14.80%
TSM 10.34 10.6 04/30/09
11.70%
APKT 9.48 9.72 06/26/09
11.63%
SNS 10.71 10.98 08/11/09
11.48%
SEE 19.99 20.49 05/04/09
10.54%
CSTR 35.4 36.28 04/30/09
5.13%
SEF 116.3 119.21 03/05/09
4.57%
LAB 7 7.17 02/09/09
−0.14%
PRSC 14.26 14.62 12/01/09
1.30%
ATHN 38.33 39.29 01/26/09 02/11/09 −8.00%
SYNA 33.18 34.01 04/24/09 05/07/09 −8.00%
GEOY 28.18 28.88 05/11/09 05/12/09 −8.00%
AMMD 16.58 16.99 06/25/09 07/09/09 −8.00%
LNCE 23.15 23.73 03/03/09 03/09/09 −8.00%
DUG 34.83 35.7 03/06/09 03/10/09 −8.00%
UTEK 13.64 13.98 04/22/09 05/13/09 −8.00%
LCAV 7.73 7.92 09/28/09 09/30/09 −8.00%
WATG 12.25 12.56 09/29/09 10/01/09 −8.00%
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 10388.9 0.77% 18.37% Down
NASDAQ 2194.35 2.61% 39.14% Up
S&P 500 1105.98 1.72% 22.44% Up
Russell 2000 602.79 4.43% 20.69% Up
Wilshire 5000 11338.4 1.66% 24.77% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Russell 2000
4.43 %
Dow Jones
8.7 %
NASDAQ Composite
18.65 %
NASDAQ Composite
39.14 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Silver Silver Silver Auto Dealerships
 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 13 10.77 9.65% 5.53%
Last Week 8 10.15 9.21% 3.18%
13 Weeks 152 11.15 15.54%
0.27%
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 XIDE Exide Tech 89
Top Technical SLXP Salix Pharmaceuticals Ltd 45
Top Fundamental HGG HHGREGG INC 52
Top Tech. & Fund. HGG HHGREGG INC 52
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 MITI Micromet Inc 86
Top Technical ANIK Anika Therapeutics Inc 82
Top Fundamental NPD CHINA NEPSTAR ADS 78
Top Tech. & Fund. ANIK Anika Therapeutics Inc 82
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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