Weekly Newsletter 03/26/10
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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 major indexes closed higher for the week but gains for the NASDAQ were curtailed by three consecutive days of losses leading to Friday's close. The index pulled back from its upper trend line on Thursday and it appears we are in for a few days of consolidation. Next week is a short week due to Good Friday so volumes may be lower causing prices to drift a little lower.


This week's downward revision to fourth quarter GDP indicates that the recovery is even more anemic than it appears. This could lead to disappointing employment figures next week from the ADP private sector employment report on Wednesday which would add to the pullback momentum.

The number of breakouts improved slightly to 24 this week, all from a cup-with-handle pattern except one high-tight-flag and one flat base. Five stocks met our target criteria of a high RS Rank and strong recent earnings: DAN, LVS, CVGI, JBL and KID.

 New Features this Week Additional Value that we added this week
< New Features >
This Week's Top Tip Tips for getting the most out of our site

We are always pleased to hear from or meet our subscribers and this week I met with a long term subscriber vacationing on Maui.

My first question always is 'Since you have been with us for many years, you must find the site valuable so how do you use it?. In this case, the answer was to cross-check our rankings against other sources and if there was agreement, then to consider buying after a confirmed breakout.

This subscriber was unaware of our Personal Watchlist feature so for his benefit, and for others who may do something similar, there's a recap of that feature below. But instead of reading the text, why not watch a video tutorial? (This is the first time we've done this so excuse me if it's somewhat amateurish).

How to Use Personal Watchlists

The Personal Watchlist (PWL) is a means to input stock ideas from multiple sources to determine if any of those many ideas are near a buy price as determined by our CANTATA methodology. Then you can choose to send an alert for the identified stocks on your lists.

Note that email alerts for PWL's are locked at 9:29AM EST for that day. Changes to your PWL's are possible while the market is open and will show up on the alert monitor page, but email alerts are locked in.

The PWL is designed to allow you to create or cut and paste a list of up to 500 stock symbols into each PWL. There are four PWL’s for a total of 2,000 stock symbols. Not that you would normally use that many but, for example, you could add one stock daily for over one year from a daily stock idea source.

Each stock list can be from a different source that you subscribe or read about in an article, or hear about from your stock investors’ group. Even stock ideas from business television programs can be put into a list for comparison with breakoutwatch.com’s stock timing and alert service.

You can select a column from a spreadsheet or a postscript (pdf) file or a Notepad file and copy/cut and then paste into the box for the selected PWL.

To cut and paste from a column of stock symbols in a postscript (pdf) file into the PWL.

1. Open the pdf file page with an Adobe Reader.
2. Click the left mouse button and release it at the bottom right of the stock symbol column
3. Hold down the “ALT” key on the keyboard
4. Click the left mouse button and hold it down as you move the cursor to the top of the list, highlighting all the symbols.
5. Release the left mouse button and the ATL key, the column will be highlighted in blue.
6. Position the cursor over the blue column and click the right mouse button.
7. Select ‘copy’ from the menu with the left mouse button.
8. Now go to the “Personal Watchlist ” menu choice under the Evaluate menu choice.
9. Click the right mouse button and selection ‘paste’ from the menu with the left mouse button.
10. The column of stock symbols should now be in the window.
11. In the top left-hand corner of the PWM window is a box under “New” type in the name of your watchlist and click the GO button. For example, “9-3-08-source XYZ” Your PWL is now saved.

Four PWL’s are the maximum at any one time. If you want to add an additional list, you must first select and delete a PWL you no longer need. You can combine many lists into one list of 500 stock symbols if you choose.

Now you can compare the PWL with the latest breakoutwatch.com chart patterns.

Under “Compare BoW watchlists” is a list and selection arrow. Select the pattern you are most interested and a table will appear showing which stock symbols on your PWL’s matches that pattern. Also listed is the number of occurrences that symbol appears in your PWL’s and the BoW watch list.

By doing this you can now identify which stocks meet your fundamental requirements and breakoutwatch.com’s technical and timing requirements.

You can change your PWL email alert preferences under the Take Action - Alerts > Alert Preferences menu choice.

You can change your email address for alerts under “Account Management” and “Update Account” tabs on the left side of any of our site pages.

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 10850.4 1.01% 4.05% Up
NASDAQ 2395.13 0.87% 5.55% Up
S&P 500 1166.59 0.58% 4.62% Up
Russell 2000 678.97 0.75% 7.08% Up
Wilshire 5000 12133 0.62% 5.53% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones
1.01 %
Russell 2000
4.54 %
NASDAQ Composite
14.55 %
Russell 2000
7.08 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Home Furnishing Stores Home Furnishing Stores Housewares & Accessories Housewares & Accessories
 Most Improved Industry (by change in technical rank2)
+ 54
+ 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 24 17.69 4.93% 1.02%
Last Week 23 16.77 7.52% 1%
13 Weeks 248 18.77 13.84%
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
Company Name
Expected Gain1
Best Overall CNO Conseco Inc. 111
Top Technical BONT Bon-Ton Stores Inc. 65
Top Fundamental FIRE Sourcefire, Inc. 67
Top Tech. & Fund. AIXG Aixtron Aktiengesellschaft 55
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
Company Name
Expected Gain1
Best Overall KID Kid Brands, Inc. 112
Top Technical CVGI Commercial Vehicle Group Inc. 89
Top Fundamental CTRP Ctrip.com International Ltd. 53
Top Tech. & Fund. CTRP Ctrip.com International Ltd. 53
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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