Weekly Newsletter 03/11/11
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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  

Note to new subscribers: each week we assess the progress of the NASDAQ Composite index as most breakouts come from the NASDAQ market.

This week the NASDAQ Completed a head and shoulders top (HST) pattern which is usually bearish. A HST is completed when the price line falls through the neckline. Sometimes the pattern is not easily discernible so I have outlined the pattern in red. The neckline is shown in purple. The pattern was completed on Thursday which was also the day the index fell through the 50 day moving average which had established a trading range floor over the last two weeks. Once breached, support turns into resistance, so the 50 day average now represents the threshold for a breakout to the upside.

When assessing the possible downside from a HST pattern we measure the height of the head above the neckline and then subtract that from the point where the price line falls through the neckline. This is shown on the chart and you can see that the target for a downward correction is around 2610. This would represent an 8% correction from the 2840 high which is in-line with typical bull market corrections.

NASDAQ Composite Daily Close

It's spring break here in Hawaii and we are heading to Oregan for a couple of weeks. There will be no daily commentary although the automated daily email will still be produced.

 New Features this Week Additional Value that we added this week

No new features this week

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

This feature will return in two weeks.

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 12044.4 -1.03% 4.03% Up
NASDAQ 2715.61 -2.48% 2.36% Up
S&P 500 1304.28 -1.28% 3.71% Up
Russell 2000 802.83 -2.69% 2.45% Up
Wilshire 5000 13747.1 -0.92% 3.44% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Wilshire 5000
-0.92 %
Dow Jones
3.35 %
Russell 2000
26.14 %
Dow Jones
4.03 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Silver Silver Silver Silver
 Most Improved Industry (by change in technical rank2)
Sporting Goods
+ 98
Aerospace/Defense - Major Diversified
+ 134
Broadcasting - Radio
+ 166
Air Services - Other
+ 196
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 11 15.31 6.01% 0.9%
Last Week 28 15.46 10.34% -0.58%
13 Weeks 237 16.38 13.08%
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 BEE Strategic Hotels & Resorts Inc. 102
Top Technical CTE SinoTech Energy Limited - ADS 95
Top Fundamental CMG Chipotle Mexican Grill, Inc. 36
Top Tech. & Fund. CMG Chipotle Mexican Grill, Inc. 36
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 AXU Alexco Resource Corp. (USA) 96
Top Technical SSI Stage Stores, Inc. 53
Top Fundamental AXU Alexco Resource Corp. (USA) 96
Top Tech. & Fund. AXU Alexco Resource Corp. (USA) 96
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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