Weekly Newsletter 03/21/14
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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 Composite made a modest gain this week but the chart shows the index essentially moving sideways on lower volume, except for Friday. The sideways move has lowered volatility resulting in the Bollinger Band moving inside the Keltner Channel resulting in a squeeze situation. Notice that momentum is falling and on the brink of turning negative which improves the odds of a move further down from here.

NASDAQ Comp.

For a bullish perspective, see Barry Ritholz talking on Bloomberg TV.
 
 Weekly Breakout Report  

There were 23 breakouts this week and the Squeeze Play watchlist continued to deliver the best performers with  Solar Holdings (JASO) and Flamel Technologies (FLML) leading the way. The charts of these two stocks give a hint as to when  Squeeze Play breakouts are about to occur. More below.

Breakouts for Week Beginning 03/17/14
Brkout Date Symbol Base Squeeze BrkoutOut Price Brkout Day Close Last Close Current % off BOP Gain at Intraday High
03/18/14 JASO SQZ Y 9.53 10.07 11.05 15.95 29.59
03/18/14 FLML SQZ Y 11.74 13.19 14.32 21.98 25.21
03/17/14 KONG CwH N 10.49 10.53 11.6 10.58 10.58
03/18/14 Z SQZ Y 90.90 91.68 100.24 10.28 10.28
03/17/14 Z SQZ Y 90.90 91.68 100.24 10.28 10.28
03/17/14 YOD HTF N 6.16 6.65 5.39 -12.50 7.95
03/21/14 PEIX HTF N 16.30 17.56 17.56 7.73 7.73
03/17/14 ANAC SQZ Y 21.66 21.68 21.21 -2.08 6.42
03/18/14 ANAC SQZ Y 21.66 21.68 21.21 -2.08 6.42
03/18/14 GTAT HTF Y 18.02 18.24 18.61 3.27 6.22
03/17/14 EGHT CwH Y 10.88 11.22 11.08 1.84 5.33
03/19/14 SGY CwH Y 37.42 38.49 39.41 5.32 5.32
03/19/14 GNW CwH N 17.18 17.56 18 4.77 4.77
03/21/14 CAAS CwH Y 8.52 8.89 8.89 4.34 4.34
03/19/14 UGP HSB N 22.11 22.36 23.01 4.07 4.07
03/18/14 POWI CwH Y 64.66 66.54 66.64 3.06 3.6
03/17/14 CLB SQZ Y 196.19 197.63 199.67 1.77 2.98
03/18/14 CLB SQZ Y 196.19 197.63 199.67 1.77 2.98
03/17/14 CEL CwH Y 13.14 13.46 12.98 -1.22 2.44
03/21/14 SNAK CwH Y 14.00 14.16 14.16 1.14 1.14
03/21/14 FOE CwH Y 14.54 14.68 14.68 0.96 0.96
03/18/14 THG SQZ Y 60.08 60.15 60.11 0.05 0.9
03/21/14 DW CwH Y 54.05 54.10 54.1 0.09 0.09
Weekly Average (23 breakouts) 3.97 6.94
 
 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

How to Anticipate Squeeze Play Breakouts


The breakout of FLML and JASO this week give an indication of when a profitable breakout from the Squeeze Play watchlist might occur. In both cases on the day before the breakout, the stocks closed at their upper Keltner Channel level and on above average volume with improving momentum. FLML offers the clearest example:

FLML

JASO shows the same characteristics. Note that in the 8 days before breakout it had closed near the KC but on each day volume was below average and a breakout didn't follow. On breakout day, it closed well  below its intraday high but was still profitable.

JASO

Conclusion

For Squeeze Play stocks look for three conditions to be filled:
  • Stock should close at or near the top of the Keltner Channel
  • Volume must be  above average
  • Momentum must be improving.
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 16302.8 1.48% -1.65% Up
NASDAQ 4276.79 0.74% 2.4% Up
S&P 500 1866.52 1.38% 0.98% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones
1.48 %
NASDAQ Composite
4.19 %
NASDAQ Composite
13.3 %
NASDAQ Composite
2.4 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Manufactured Housing Manufactured Housing Manufactured Housing Publishing - Newspapers
 Most Improved Industry (by change in technical rank2)
Beverages - Soft Drinks
+ 172
Gold
+ 158
Silver
+ 213
Silver
+ 213
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.
 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 REED Reeds, Inc. 85
Top Technical REED Reeds, Inc. 85
Top Fundamental REI Ring Energy, Inc. 54
Top Tech. & Fund. REI Ring Energy, Inc. 54
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 EGHT 8x8 Inc 66
Top Technical GNW Genworth Financial Inc 45
Top Fundamental SGY Stone Energy Corporation 38
Top Tech. & Fund. SGY Stone Energy Corporation 38
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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