Weekly Newsletter 01/24/14
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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 NASDAQ consolidation we anticipated last week arrived on Thursday as markets fell globally. The DJI and S&P 500 experienced the biggest losses with both indexes closing below their 50 day moving average. The NASDAQ composite, whose stocks are somewhat less impacted by global trading, was more resilient and remains above the 50 DMA and within the Keltner Channel. Recent history shows that the lower Keltner bound has provided a support level, so a break of that level would confirm weakness and a break below the 50 DMA would signal that we move from consolidation to correction.

NASDAQ Comp.

The number of breakouts fell to five this week. ADHD broke out of a CwH  pattern and rose to a high of over 12% but profit taking reduced the stock to a loss of 2.5% by Friday's close.
 New Features this Week Additional Value that we added this week

A column identifying stocks that were in a squeeze situation  immediately prior to breakout was added to  the breakout report. This report does not yet include breakouts from the new "Squeeze Play" watchlist, however. That is still under development.
This Week's Top Tip Tips for getting the most out of our site

Although  our  market trend indicators remain positive, this is a time for caution while the markets a consolidating/correcting. You will see the number of long  position alerts falling to a dribble while the number of short position alerts rises to an avalanche (there were 29 on Friday). Unless you are an experienced  trader, I recommend staying out of the market until we see if this is just a consolidation of the gains of the last months, or a more serious correction .
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 15879.1 -3.52% -4.21% Up
NASDAQ 4128.17 -1.65% -1.16% Up
S&P 500 1790.29 -2.63% -3.14% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
-1.65 %
NASDAQ Composite
4.69 %
NASDAQ Composite
14.25 %
NASDAQ Composite
-1.16 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Manufactured Housing Medical Practitioners Drugs Wholesale Toy & Hobby Stores
 Most Improved Industry (by change in technical rank2)
Auto Parts Stores
+ 202
Auto Manufacturers - Major
+ 117
Medical Practitioners
+ 186
Medical Practitioners
+ 204
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 5 9.46 5.82% -1.04%
Last Week 6 9.54 5.15% -9.87%
13 Weeks 122 10 20.45%
6.02%
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 ORBC ORBCOMM Inc 105
Top Technical ORBC ORBCOMM Inc 105
Top Fundamental QIHU Qihoo 360 Technology Co Ltd 47
Top Tech. & Fund. QIHU Qihoo 360 Technology Co Ltd 47
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 BLDR Builders FirstSource, Inc. 86
Top Technical BREW Craft Brew Alliance Inc 59
Top Fundamental EFII Electronics For Imaging, Inc. 40
Top Tech. & Fund. EFII Electronics For Imaging, Inc. 40
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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