Weekly Newsletter 04/02/10
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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  


The NASDAQ Composite has continued to consolidate in a flat base pattern. This is also reflected in the tightening Bollinger Bands which is a result of less volatility (lower variance) in the index. Breakouts from a flat base can be to the upside or downside and considerable evidence of an improving economy (increased industrial production, positive job growth) indicate that the most likely outcome is a further move to the upside. There are different points of view though, and one warning is contained in this link Dow 12 Month Rate-of-Change Sends Warning Signal.

Of many promising aspects to Friday's labor report, it was very encouraging to see a huge 17% reduction in the number of discouraged workers as mounting consumer confidence is essential to a strong recovery.

discouraged workers
source: Daniel Indiviglio

The flat base pattern produces fewer breakouts and we saw the number drop to six this week from twenty-five last week. Should the breakout be to the upside, then we can expect the number of breakouts to jump up again.

Special 'Easter Eggs' for Newsletter Readers

Normally reserved for our site subscribers only, these 'eggs' could make you some money. The following stocks are rated 'MTC' on our cup-with-handle watchlist (for an explanation of MYC and more MTC stocks, see below):

Brkout Price
Brkout Volume
Company Name
WAC 16.81 241931
Walter Investment Management Corp.
CVGI 7.89 220280
Commercial Vehicle Group Inc.
CAR 12.26 5025336
Avis Budget Group - Inc.
HGSI 33.13 4773135
Human Genome Sciences Inc.
CITP 17.63 997995
COMSYS IT Partners - Inc.
GCI 17 7768946
Gannett Co. - Inc.
CAAS 25.1 1720502
China Automotive Systems Inc.
SAH 12.62 999050
Sonic Automotive Inc.
AXL 11.36 4543422
American Axle & Manufacturing Holdings Inc.
OSK 41.78 2278452
Oshkosh Corporation
UIS 40.41 852503
Unisys Corporation
CNO 6.63 6984113
Conseco Inc.
CYD 18.67 596142
China Yuchai International Limited
MTW 13.74 4099805
Manitowoc Co. Inc.
SGY 18.79 1473968
Stone Energy Corp.
MOD 11.97 380862
Modine Manufacturing Company
MEOH 26.79 538898
Methanex Corp.
CBI 25 1512420
Chicago Bridge & Iron Company N.V.
TTI 13.5 951971
TETRA Technologies Inc.
CTB 21.08 1571436
Cooper Tire & Rubber Co.
 New Features this Week Additional Value that we added this week


No new features this week but we are working on a site redesign that will correct some broken menu links for users of Internet Explorer. The changes will (hopefully) be transparent and should go into effect early next week.

This Week's Top Tip Tips for getting the most out of our site


Early Detection of our Target Criteria Stocks

Earlier this year we undertook an analysis to determine the factors that were most likely to cause a stock to rise by at least 25% after breakout (you can read it here). We now indicate the stocks that meet these criteria with a thumbs-up icon on our watchlists.

Platinum subscribers can get an early wake-up as to which stocks meet these criteria and are in the process of building their base, but which do not yet meet all the criteria for listing on a our watchlists. They do so by going to Mine for Candidates >Database Search and making selections as follows:


As of Thursday evening, this search produced these stocks to look out for (top ten only):

BW Top 10

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 10927.1 0.71% 4.79% Up
NASDAQ 2402.58 0.31% 5.88% Up
S&P 500 1178.1 0.99% 5.65% Up
Russell 2000 683.98 0.74% 7.87% Up
Wilshire 5000 12250.7 0.97% 6.55% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
S&P 500
1.06 %
Russell 2000
7.87 %
Russell 2000
17.17 %
Russell 2000
7.87 %
 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 6 17.85 5.91% 4.24%
Last Week 25 17.69 7.34% 1.41%
13 Weeks 251 18.15 14.37%
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 AEA Advance America, Cash Advance Centers Inc. 112
Top Technical CITP COMSYS IT Partners, Inc. 35
Top Fundamental FIRE Sourcefire, Inc. 63
Top Tech. & Fund. CAAS China Automotive Systems Inc. 77
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 LOCM Local.com Corp. 110
Top Technical PL Protective Life Corp. 54
Top Fundamental AIXG Aixtron Aktiengesellschaft 58
Top Tech. & Fund. PL Protective Life Corp. 54
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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