Weekly Newsletter 04/11/14
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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 continues to be hit harder than the other major indexes showing the largest loss for the week and also the largest loss year to date. The index is close to the February support level of 3968 and just below that is the 200 day moving average. These levels are psychologically significant to traders and may provide a measure of relief. Regardless of these levels, watch our market signals and stay on the sidelines until they turn up. The signals turned down on March 31 which should have saved you two weeks of grief. Stay calm now until they turn positive  again.

NASADQ Comp.
 Weekly Breakout Report  

Best performer for the week was QID (ProShares UltraShort SmallCap600). This is an ETF that allows you to go long while benefiting from short sales made by the ETF. Other opportunities to go long were restricted to CwH stocks and once again those that were in a squeeze were among the most profitable.

Breakouts for Week Beginning 04/07/14
Brkout Date Symbol Base Squeeze Brkout Price Brkout Day Close Last Close Current % off BOP Gain at Intraday High
04/10/14 QID HSB N 58.84 61.71 63.16 7.34 7.83
04/08/14 PAM CwH N 6.27 6.60 6.47 3.19 6.06
04/10/14 BXE CwH Y 8.76 8.82 9.03 3.08 4
04/08/14 GST CwH Y 6.59 6.66 6.2 -5.92 3.95
04/10/14 REI CwH Y 16.88 16.96 16.99 0.65 3.85
04/09/14 TECD CwH Y 62.59 64.83 60.96 -2.60 3.58
04/08/14 SCIF CwH N 37.24 37.28 37.75 1.37 2.82
04/09/14 MNKD CwH N 6.99 7.00 6.41 -8.30 0.14
Weekly Average (8 breakouts) -0.15 4.03

 
 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

Squeeze Breakout Directional Options Trading

A subscriber sent me the following explanation of how he is making outrageous profits by options trading from the CwH list....

Hi Mike,

I wanted to share with you an example of the kind of option trades I am doing using your CWH Watchlist-with the new Squeeze Filter.  The best trades are those where I buy an ITM (in the money) Call option at the closest strike price to the BOP (and still be ITM).

I only take trades if the Squeeze  = "Y".

I buy the closest expiration unless there are less than 7 days left-in which case I go to the next month. Finally, I am looking for adequate option volume at the strike price near BOP and decent bid-ask spreads.

Here's a real example:

Stock: EOG
CWH Alert:  3/26/14 at 7:47 AM (Mountain time) (This is when I got it on my cell phone)
BOP:  193.22
Option traded:  MAR(2014) 192.50 CALL  

Purchased at: $2.25
Sold 3/28 at:  $5.80

Gain%: 257% in 2 days

This is a good trade - meaning not all of them do this well - however, it isn't the best one either.  Let me know if you get any questions on these kind of directional trades.

Regards, Jim

While JIm is referring to squeeze breakouts from the cup-with-handle list, the strategy can also be applied to the Squeeze Play list.

If you would like to know more about Jim's strategy, post your question to the support forum and let the conversation begin.


 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 16026.8 -2.35% -3.32% Down
NASDAQ 3999.73 -3.1% -4.23% Down
S&P 500 1815.69 -2.65% -1.77% Down
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones
-2.35 %
S&P 500
-1.45 %
S&P 500
6.6 %
S&P 500
-1.77 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Toy & Hobby Stores Medical Practitioners Manufactured Housing Toy & Hobby Stores
 Most Improved Industry (by change in technical rank2)
Beverages - Wineries & Distillers
+ 77
Medical Practitioners
+ 212
Semiconductor - Memory Chips
+ 192
Aluminum
+ 208
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 MNKD MannKind Corporation 108
Top Technical MNKD MannKind Corporation 108
Top Fundamental SAM Boston Beer Company, Inc. (The) 26
Top Tech. & Fund. SAM Boston Beer Company, Inc. (The) 26
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 GST Gastar Exploration Inc. 104
Top Technical SCIF Market Vectors India Small Cap Index ETF 11
Top Fundamental GST Gastar Exploration Inc. 104
Top Tech. & Fund. REI Ring Energy, Inc. 62
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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