Weekly Newsletter 06/06/14
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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.

Webinar: Trading In-The-Money Options from the Cup-with-Handle Watchlist

We are offering a "webinar" on how to use alerts from the cup-in-handle watchlist to trade in-the-money options on Monday, 16th June at 6pm Mountain Time. This strategy focuses on using alerts from the CwH watchlist that are also in a "squeeze" and offers the promise of strong returns at low risk.

If you are interested in attending, please send me an email and details on how to attend the webinar will be forwarded to you in the week beginning June 9th.
 
 Weekly Commentary  

 
The NASDAQ continued its rise and again outpaced the other two major indexes. Volume levels continue to be below average with even Thursday's accumulation day failing to better the 50 day average. Nevertheless, the outlook is promising after resistance at 4286 was pierced. The next challenge comes at 4344.

NASDAQ Comp.
 Weekly Breakout Report  

The number of breakouts continued to rise. Only one failed to stay positive at Friday's  close.

Breakouts for Week Beginning 06/02/14
Brkout Date Symbol Base Squeeze BrkoutOut Price Brkout Day Close Last Close Current % off BOP Gain at Intraday High
06/02/14 NPSP SQZ Y 31.23 32.6 34.6 10.79 10.79
06/04/14 MEAS SQZ Y 67.66 70.5 74.73 10.45 10.45
06/03/14 VLCCF CwH N 14.27 14.65 15.74 10.30 10.3
06/03/14 OPHT CwH N 41.00 41.75 45.14 10.10 10.1
06/03/14 GIII SQZ Y 76.02 82.54 82.67 8.75 9.41
06/03/14 AMAT CwH N 20.58 21.42 21.82 6.03 6.03
06/03/14 UHS CwH N 90.14 92.83 94.82 5.19 5.68
06/05/14 VPFG SQZ Y 25.83 26.72 27.28 5.61 5.61
06/04/14 TPX CwH Y 56.03 57.43 59.02 5.34 5.34
06/05/14 BBVA CwH N 12.87 13.17 13.53 5.13 5.13
06/05/14 KFY CwH N 30.75 31.81 32.28 4.98 4.98
06/06/14 GRFS CwH N 43.50 45.37 45.37 4.30 4.3
06/04/14 CAVM CwH N 49.38 49.88 50.65 2.57 4.29
06/03/14 BDC SQZ Y 73.11 73.85 76.06 4.04 4.04
06/05/14 TSU CwH Y 28.44 28.53 29.47 3.62 3.62
06/03/14 CBF SQZ Y 24.46 24.54 25.34 3.60 3.6
06/06/14 MCS SQZ Y 17.53 18.12 18.12 3.37 3.37
06/05/14 CNX SQZ Y 45.96 47.41 47.45 3.24 3.24
06/05/14 SHEN SQZ Y 28.96 29.89 29.87 3.14 3.21
06/05/14 SNMX SQZ Y 8.13 8.39 8.31 2.21 3.2
06/06/14 TSU SQZ Y 28.63 29.47 29.47 2.93 2.93
06/05/14 RLD SQZ Y 12.40 12.61 12.76 2.90 2.9
06/05/14 TPX SQZ Y 57.53 57.61 59.02 2.59 2.59
06/06/14 EEFT CwH N 47.99 49.21 49.21 2.54 2.54
06/06/14 PAY SQZ Y 35.82 36.72 36.72 2.51 2.51
06/03/14 AMRI SQZ Y 16.94 17.28 17.21 1.59 2.01
06/06/14 BNCN SQZ Y 17.65 17.98 17.98 1.87 1.87
06/05/14 RXN SQZ Y 28.04 28.22 28.56 1.85 1.85
06/05/14 STI SQZ Y 38.93 39.2 39.64 1.82 1.82
06/03/14 TSM CwH Y 20.89 21.24 21.09 0.96 1.68
06/05/14 HPTX CwH N 29.41 29.75 26.95 -8.36 1.16
06/05/14 HEES SQZ Y 37.78 38.16 37.66 -0.32 1.01
06/05/14 OFC SQZ Y 28.04 28.27 28.28 0.86 0.86
06/06/14 AAON SQZ Y 32.89 33.12 33.12 0.70 0.7
06/05/14 PAG SQZ Y 48.22 48.35 48.53 0.64 0.64
06/06/14 TRNX CwH N 22.26 22.40 22.4 0.63 0.63
06/03/14 ROL SQZ Y 31.08 31.18 31.1 0.06 0.45
06/06/14 BDSI CwH N 9.96 10.00 10 0.40 0.4
06/06/14 STAG SQZ Y 24.94 25.01 25.01 0.28 0.28
06/02/14 SYY SQZ Y 37.63 37.64 37.68 0.13 0.13
06/06/14 SPR SQZ Y 33.68 33.69 33.69 0.03 0.03
Weekly Average (41 breakouts) 3.16 3.55
 
 New Features this Week Additional Value that we added this week

Cup with Handle Squeeze Breakout Probability

In our April 5, 2014 newsletter, I described how I was able to calculate the probability that a stock on the Squeeze Play watchlist would reach its squeeze-off price. This calculation has now been extended to the cup with handle watchlist. Please note that the probability refers to the "Squeeze Off" (SO) price and not the breakout price (which is the handle pivot).
This Week's Top Tip Tips for getting the most out of our site

Interpreting the Cup with Handle Squeeze Off Probability

So we have new metric, now how can we use it? Lets look at a stock setting up  for a breakout on Monday, June 9, 2014.

As of Friday, June 6, 2014, GMCR had the highest probability of a SO breakout (0.81). You can see from it's chart below that the close price (122.07) was just below the handle pivot breakout price (123.62) and the SO price was 124.6. The SO price is above the pivot so if there is a high probability that GMCR will reach the SO price then it follows that there is a high probability that it will reach the breakout price.

Note: just because a stock reaches its breakout price does not mean that it is classed as a breakout, as we require volume to be at least 150% of the 50 day ADV. However, what we are really interested in is gain in price, regardless of volume, so the high probability of a breakout on price is attractive.

GMCR Squeeze
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 16924.3 1.24% 2.1% Up
NASDAQ 4321.4 1.86% 3.47% Up
S&P 500 1949.44 1.34% 5.47% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
1.86 %
S&P 500
3.8 %
S&P 500
8 %
S&P 500
5.47 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Toy & Hobby Stores Toy & Hobby Stores Toy & Hobby Stores Toy & Hobby Stores
 Most Improved Industry (by change in technical rank2)
Cleaning Products
+ 98
Cleaning Products
+ 108
Foreign Utilities
+ 201
Foreign Utilities
+ 198
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 SKBI Skystar Bio-Pharmaceutical Company 101
Top Technical SKBI Skystar Bio-Pharmaceutical Company 101
Top Fundamental TPLM Triangle Petroleum Corporation 67
Top Tech. & Fund. TPLM Triangle Petroleum Corporation 67
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 BDSI BioDelivery Sciences International, Inc. 81
Top Technical TRNX Tornier N.V. 42
Top Fundamental EEFT Euronet Worldwide, Inc. 32
Top Tech. & Fund. EEFT Euronet Worldwide, Inc. 32
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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