Weekly Newsletter 04/27/12
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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  

Three consecutive accumulation days (see our equivolume chart) for the NASDAQ (and gains by the other major indexes) confirm that the bulls are back in control as earnings season brings some spectacular profit gains. A continued cheap money policy, for as far as the eye can see, from the Fed practically guarantees that the investment houses will continue to borrow cheaply and push up the price on equities. More confirmation that there is a strong upward bias is that the strength of the last three days comes in the face of increasing unemployment claims, lower than expected first quarter GDP and continued concerns over europe as the UK falls back into recession and austerity measures are clearly seen to be failing.

Our trend indicator for the S&P 500 turned up this week. That the index also moved through its 50 day average was coincidental as other factors determine the direction of the trend in our model. Although the NASDAQ saw three accumulation days, our trend signal for the NASDAQ remains down but we can expect the trend signal to change in a day or so if the upward move continues.

NASDAQ Equivolume chart

Although the number of breakouts fell and were well below the recent average, in part due to there being fewer candidates on our watchlists, there were some strong performers as this table of the week's breakouts shows.

Tables

B'out Date Symbol Base B'Out Price Last Close Current %
off BOP
Gain at Intra-
day High
MTC*
4/27/2012 ARBA CwH 36.05 39.35 9.15% 12.21%
4/26/2012 AZO FB 385.23 397.13 3.09% 3.60%
4/26/2012 SUSQ CwH 10.2 10.58 3.73% 4.31%
4/26/2012 STMP CwH 29.15 30.24 3.74% 11.46% yes
4/26/2012 MDC CwH 27.2 28.34 4.19% 5.18%
4/26/2012 KNXA CwH 32.58 32.46 −0.37% 3.07%
4/26/2012 CSGP CwH 72.12 73.17 1.46% 1.80%
4/26/2012 CRUS CwH 24.63 27.87 13.15% 14.70%
4/25/2012 AKAM CwH 38.41 33.18 −13.62% 1.77%
4/24/2012 ARAY CwH 7.85 7.83 −0.25% 2.80% yes








*Meets Target Criteria


 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

We had hoped to have an update on our analysis of how to trade breakout pullbacks but ran out of time. In response to last week's report I received the following comment: "I did enjoy looking at your exploration of this trading concept!  It was Richard Wyckoff, I believe who first proposed to not buy the breakout, but rather wait for playing the retracement test back to the pivot of a breakout.  Wyckoff's first job was as a stock runner in 1888 as a 15 year old, and in 1908 he published the first technical analysis method of its kind.  I guess we can't say it is a new idea......"

Maybe old wine in new bottles but it looks promising so we will continue our work.
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 13228.3 1.53% 8.27% Down
NASDAQ 3069.2 2.29% 17.81% Down
S&P 500 1403.36 1.8% 11.59% Up
Russell 2000 825.47 2.66% 11.41% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Russell 2000
2.66 %
NASDAQ Composite
8.97 %
NASDAQ Composite
12.13 %
NASDAQ Composite
17.81 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Sporting Goods Sporting Goods Personal Computers Personal Computers
 Most Improved Industry (by change in technical rank2)
General Contractors
+ 139
Broadcasting - Radio
+ 83
Computers Wholesale
+ 109
Building Materials Wholesale
+ 189
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 10 22.62 6.09% 2.43%
Last Week 13 23.69 4.8% 3.48%
13 Weeks 313 24.69 11.45%
3.42%
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 RENN Renren Inc 111
Top Technical RENN Renren Inc 111
Top Fundamental RDA Rda Microelectronics Inc (ADR) 69
Top Tech. & Fund. RDA Rda Microelectronics Inc (ADR) 69
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 ARAY Accuray Incorporated 90
Top Technical CSGP CoStar Group, Inc. 25
Top Fundamental STMP Stamps.com Inc. 46
Top Tech. & Fund. STMP Stamps.com Inc. 46
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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