Weekly Newsletter 10/04/13
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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 government shutdown has done little to slow the NASDAQ Composite which continues to hold up well with a gain for the week of 0.7%, easily outperforming the other major indexes. The S&P 500 slipped only slightly and our trend indicators for the NASDAQ and S&P 500 remain positive. Not so for the DJI where our trend indicator turned down on  Monday.

NASDAQ Comp.

CCIH (ChinaCache International Holdings (ADR)
CCIHThe number of breakouts rose to 23 with CCIH being the outstanding performer with a 33.7% gain after breaking out from a text book cup with handle formation on Wednesday. Note how the stock declined after setting the left cup in early August and then bumped along on lower than average volume. The stock started its rise on September 25 following an article on the Motley Fool web site  ( http://www.fool.com/investing/general/2013/10/01/will-chinacache-join-the-china-party.aspx) that pumped up the stock with the news that their chief technology officer had invested over $100k in the ADR. If he's still holding he's seen a  63% gain since Wednesday's open.

This  stock may well see future strong gains but in the short tern is likely to pull back. If you believe in its long term future, wait for it to fall back to near the $6.20 pivot price.
 New Features this Week Additional Value that we added this week

Not exactly a new feature, but what I believe is a more user friendly version of our "Alerts Issued Today" page.

The page is now 'tabbed' for breakouts from each watchlist and each tab list the number of breakouts for each list. You need only click on the tabs that show a positive number of breakouts. Click this image for a link to Friday's breakouts using the new format.

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

A Note about our Data, Charts and the CwH Backtest

In order to save costs and keep our subscription rates low, we maintain our own data based on end of day data published by Yahoo and Google. When a  split or dividend is announced we adjust our data historically in relationship to the new closing values. Usually, this is done on the day the split or dividend is paid but sometimes we miss it. To be sure that we always catch what we missed, we always refresh our data for the last five years from the published sources each weekend.

This process keeps our time series data correct, but our historical breakout data is based on the actual prices at the time of the breakout. This means that in the case of a, say, 2 for 1 split, our breakout price will be twice our historically adjusted price.. Normally our backtest  code recognizes this and adjusts the breakout price and volume by the split factor.

An alert subscriber who was running the backtest saw that this adjustment hadn't occurred for stock NCT and I've now made the necessary adjustment.

If you find an error in our data, please let me know ASAP and I will gratefully correct it!
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 15072.6 -1.22% 15.02% Down
NASDAQ 3807.75 0.69% 26.1% Up
S&P 500 1690.5 -0.07% 18.53% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
0.69 %
NASDAQ Composite
9.44 %
NASDAQ Composite
18.85 %
NASDAQ Composite
26.1 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Electronics Stores Electronics Stores Toy & Hobby Stores Electronics Stores
 Most Improved Industry (by change in technical rank2)
Drug Stores
+ 67
Wholesale - Other
+ 200
Personal Computers
+ 183
Photographic Equipment & Supplies
+ 182
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 23 9.54 8.37% 4.58%
Last Week 14 8.85 14.01% 10.74%
13 Weeks 127 10.31 19.76%
11.65%
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 TAOM Taomee Holdings Ltd (ADR) 111
Top Technical TAOM Taomee Holdings Ltd (ADR) 111
Top Fundamental NOAH Noah Holdings Limited (ADR) 77
Top Tech. & Fund. NOAH Noah Holdings Limited (ADR) 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
Category
Symbol
Company Name
Expected Gain1
Best Overall TQNT TriQuint Semiconductor 82
Top Technical YDKN Yadkin Financial Corp 57
Top Fundamental PRXL PAREXEL International Corporation 34
Top Tech. & Fund. PRXL PAREXEL International Corporation 34
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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