Weekly Newsletter 06/27/14
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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  

After bumping up against resistance all week the NASDAQ finally broke through on strong volume on Friday. The reason for volume being more than double the 50 day average was unclear, but the tech sector was buoyant on the successful IPO of GoPro which rose 38% above its initial offering price.

NASDAQ Comp.
 Weekly Breakout Report  
 
The number of breakouts fell slightly from last week but remained at a high level. The overall market strength meant that our watchlists were dominated by the cup with handle and Squeeze Play patterns. The top performer was WUBA which I discuss further in my Top Tip below.

Breakouts for Week Beginning 06/23/14
Brkout Date Symbol Base Squeeze BrkoutOut Price Brkout Day Close Last Close Current % off BOP Gain at Intraday High
06/26/14 WUBA CwH N 46.73 52.22 54.9 17.48 20.91
06/26/14 MEI CwH N 34.18 37.68 36.79 7.64 12.14
06/25/14 MEG SQZ Y 19.37 20.33 20.45 5.58 9.09
06/25/14 SIMO CwH N 18.47 18.84 19.84 7.42 7.69
06/23/14 BCRX CwH N 12.00 12.00 12.52 4.33 6.25
06/25/14 GTN CwH N 12.16 12.20 12.79 5.18 5.59
06/27/14 EGO CwH N 7.24 7.56 7.56 4.42 5.39
06/25/14 CBK CwH N 8.72 9.04 8.93 2.41 4.93
06/27/14 CLDN CwH N 14.47 15.00 15 3.66 4.63
06/27/14 HHC SQZ Y 152.66 158.11 158.11 3.57 3.57
06/27/14 NRF SQZ Y 17.28 17.64 17.64 2.08 3.41
06/23/14 FSLR CwH N 69.75 70.15 71.4 2.37 3.23
06/24/14 BPL SQZ Y 80.97 81.25 82.59 2.00 3.01
06/27/14 BAS SQZ Y 27.91 28.32 28.32 1.47 2.87
06/25/14 NCS CwH N 18.85 18.98 19.05 1.06 2.81
06/25/14 BDC CwH N 77.05 77.17 78.83 2.31 2.79
06/27/14 PATK CwH N 43.46 44.19 44.19 1.68 2.6
06/27/14 AHT SQZ Y 11.24 11.51 11.51 2.40 2.4
06/23/14 PZE CwH N 6.67 6.83 6.33 -5.10 2.4
06/23/14 ACT SQZ Y 221.19 221.35 223.27 0.94 2.28
06/27/14 CRR CwH N 147.25 149.94 149.94 1.83 2.16
06/27/14 MMSI SQZ Y 14.95 15.2 15.2 1.67 1.94
06/23/14 IPXL SQZ Y 30.10 30.36 30.25 0.50 1.93
06/27/14 IGTE SQZ Y 35.25 35.81 35.81 1.59 1.9
06/23/14 INVN CwH N 22.09 22.45 21.99 -0.45 1.63
06/24/14 IDXX SQZ Y 132.72 134.38 133.71 0.75 1.63
06/27/14 ZINC CwH N 17.90 18.15 18.15 1.40 1.56
06/27/14 GMT SQZ Y 66.38 67.25 67.25 1.31 1.39
06/27/14 MPO CwH N 7.34 7.40 7.4 0.82 1.09
06/27/14 LPI CwH N 30.72 30.74 30.74 0.07 0.98
06/27/14 ALKS CwH N 50.88 50.94 50.94 0.12 0.14
Weekly Average (31 breakouts) 2.66 4.01
 
 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

Cup and Handle Analysis
- WUBA

WUBA

If you had studied the chart for WUBA on Wednesday evening (6/25/14) there were three indications that this could be a strong breakout:
  1. On 6/11 there was a strong breakout from a squeeze situation. You can see the stock was ascending the right side of a cup at the time before forming the pivot of a cup and handle on 6/18. While ascending the cup there was a strong breakout on 6/11 from a squeeze situation. This strong squeeze breakout was an indication that there was potential for the stock to go higher. Note that the RS for the stock before the squeeze breakout was only 34 - well below the 70 that is needed for it to qualify for our squeeze play watchlist, which looks for stocks in the right side of a cup.
  2. The handle showed an almost perfect formation - falling on lower volume after the pivot and then rising on progressively higher volume before the breakout. (see Anatomy of a Cup-with-Handle Chart Pattern).
  3. As the stock rose in the handle there was quite strong buying pressure with volume at the average daily volume level and momentum (look at the lower chart) was increasing.

These factors didn't guarantee a breakout on 6/26 but they increased the odds. Trading is a game of probabilities so you must look for the little things that can give you an edge.

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 16851.8 -0.56% 1.66% Up
NASDAQ 4397.93 0.68% 5.3% Up
S&P 500 1960.96 -0.1% 6.09% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
0.68 %
NASDAQ Composite
5.56 %
S&P 500
6.49 %
S&P 500
6.09 %
 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)
Silver
+ 43
Silver
+ 134
Foreign Utilities
+ 200
Foreign Utilities
+ 210
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 SAND Sandstorm Gold Ltd 107
Top Technical SAND Sandstorm Gold Ltd 107
Top Fundamental EPAM EPAM Systems, Inc. 46
Top Tech. & Fund. EPAM EPAM Systems, Inc. 46
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 PZE Petrobras Argentina S.A. 107
Top Technical BCRX BioCryst Pharmaceuticals, Inc. 71
Top Fundamental PATK Patrick Industries, Inc. 44
Top Tech. & Fund. PATK Patrick Industries, Inc. 44
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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