Weekly Newsletter 05/01/15
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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 gave up 1.7% this week as earnings proved disappointing in most cases, but the size of upside surprises was above the norm.

"With 72% of the companies in the S&P 500 reporting actual results for Q1 to date, fewer companies are reporting actual EPS above estimates (71%) and actual sales above estimates (46%) than average. However, the companies that are reporting upside earnings surprises are surpassing estimates by much wider margins (+6.2%) than average." (Facset, May 1,2015)

The largely disappointing earnings combined with with relatively large surprises contributed to market uncertainty and therefor higher volatility.

Nevertheless, The market uptrend continues with the NASDAQ continuing t find support when threatened at about the 50 day average level.
NASDAQ Composite Chart
 Weekly Breakout Report  

Clicksoftware Technologies (CKSW) was the top performing breakout due to a takeover announced after the market close on Thursday. Our alert was issued at 3:01pm on Thursday. Read more about this below.
 
Breakouts for Week Beginning 04/27/15
Brkout Date Symbol Base Squeeze BrkoutOut Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
04/29/15 CKSW CwH N 9.72 9.82 88 12.43 27.88 29.12
04/30/15 AAWW DB N 44.98 48.74 77 51.95 15.50 17.25
04/29/15 MSTR CwH Y 176.63 187.07 82 182.68 3.43 12.04
04/30/15 AVG SQZ Y 22.01 23.92 81 23.87 8.45 11.72
04/27/15 IPWR CwH N 10.22 10.30 92 10.45 2.25 10.57
04/27/15 USLV HSB N 18.69 19.29 2 18.42 -1.44 9.68
05/01/15 BCOR HSB N 14.50 15.55 14 15.55 7.24 8.21
04/30/15 AAC CwH Y 33.25 34.66 91 34.43 3.55 6.47
04/30/15 CSGP SQZ Y 201.10 204.43 87 204.47 1.68 6.2
04/30/15 SPCB CwH N 11.68 12.16 90 12.37 5.91 6.08
05/01/15 YUM CwH N 87.10 91.90 85 91.9 5.51 5.61
05/01/15 AA HSB N 13.55 14.15 14 14.15 4.43 5.39
04/29/15 RNG CwH N 17.19 17.64 89 17.13 -0.35 4.42
04/29/15 LVLT CwH N 54.67 56.68 83 55.71 1.90 4.34
04/27/15 CNCO HSB N 7.80 8.09 29 7.7 -1.28 3.72
04/29/15 EEFT CwH N 59.92 61.01 85 58.36 -2.60 3.47
05/01/15 WAB CwH N 98.61 99.82 82 99.82 1.23 2.92
05/01/15 VAC SQZ Y 82.31 84.4 90 84.4 2.54 2.75
05/01/15 CRUS CwH N 35.13 35.80 95 35.8 1.91 2.11
05/01/15 CSX CwH N 37.12 37.46 80 37.46 0.92 1.48
04/27/15 MNST SQZ Y 141.88 143.44 96 141.13 -0.53 1.1
04/28/15 SLAB CwH N 52.98 53.31 80 52.26 -1.36 0.98
04/27/15 BOOT HTF N 25.76 25.79 91 24.55 -4.70 0.31
Weekly Average (24 breakouts) 5.23 8.51
*RS Rank on day before breakout.

 
 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

Use Limit Orders when Buying at Open

At 3:01 pm on Thursday we issued an alert for ClickSoftware Technologies (CKSW). CKSW was on our CWH watchlist with a breakout price of 9.72 and we issued an alert when the price was 9.75. The stock closed for the day at 9.82. If you were lucky enough to place an order before the close you were in for a massive windfall as the stock gapped up at next day's open to 12.53 on news that the company was to be acquired by Fransisco Partners for $12.65 a share.

If instead of buying on the alert, you placed a buy at open order at market then you would be surprised at the 28% premium that you would have to pay with very little upside potential to 12.65 of less than 1%.

To avoid gaps-up when an acquisition is made we recommend a limit order no more than 5% above the breakout price. We show that limit on our email alerts. Here's the alert for CKSW with the relevant prices circled.

Note that the stock closed for the day within the limit price so a buy order on receipt of the alert with a limit of 10.21 would have been executed, but an overnight order with the same limit would not have been executed as the stock opened at 12.53.

CKSW Alert

CKSW cup and handle  pattern chart

Conclusion

When acting on an alert to either place an immediate order, or to place an overnight order, place a 5% limit on the order. You will find the limit price on the alert we send.

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 18024.1 -0.31% 1.13% Up
NASDAQ 5005.39 -1.7% 5.69% Up
S&P 500 2108.29 -0.44% 2.4% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones
-0.31 %
NASDAQ Composite
7.99 %
NASDAQ Composite
8.09 %
NASDAQ Composite
5.69 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Drug Stores Drugs Wholesale Toy & Hobby Stores Toy & Hobby Stores
 Most Improved Industry (by change in technical rank2)
Agricultural Chemicals
+ 41
Building Materials Wholesale
+ 103
Office Supplies
+ 192
Dairy Products
+ 178
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 GTIM Good Times Restaurants Inc. 99
Top Technical GTIM Good Times Restaurants Inc. 99
Top Fundamental WLDN Willdan Group, Inc. 74
Top Tech. & Fund. WLDN Willdan Group, Inc. 74
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 AAC AAC Holdings, Inc. 54
Top Technical IPWR Ideal Power Inc. 52
Top Fundamental AAC AAC Holdings, Inc. 54
Top Tech. & Fund. AAC AAC Holdings, Inc. 54
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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