Weekly Newsletter 06/26/15
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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  

NASDAQ Comp Chart
The NASDAQ Composite set another new high on Tuesday but ended the week with a two times average volume decline leading to an overall loss for the week of 0.7%. The other two major indexes also lost ground for the week. Our trend indicators remain positive for the NASDAQ and are still negative for the DJI and S&P 500.

With the announcement that Greece will hold a referendum on July 5, the debt crisis is likely to continue unresolved next week and so continued market weakness can be expected.

Barry Ritholz' Blog frequently posts an enjoyable quote of the day, and today's I particularly enjoyed:

"Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give." -William A. Ward
 Weekly Breakout Report  

This was another strong week for breakouts although the negative trend towards the end of the week reduced overall gains. The top performer of the week provided another example our recent recommendation that the strongest breakouts come after a day of increasing volume and positive price movement.

Volatility Squeeze breakout for DMRC.

Breakouts for Week Beginning 06/22/15
Brkout Date Symbol Base Squeeze BrkoutOut Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
06/22/15 DMRC SQZ Y 32.15 32.69 91 43.17 34.28 34.53
06/24/15 EFOI CwH N 7.46 7.62 94 8.73 17.02 17.29
06/22/15 EXAS SQZ Y 29.32 30.69 93 30.02 2.39 6.28
06/22/15 PTLA CwH N 45.50 48.27 93 45.62 0.26 6.09
06/22/15 TSEM SQZ Y 16.03 17 88 15.835 -1.22 6.05
06/22/15 TGLS CwH N 12.78 13.00 85 13.05 2.11 5.71
06/22/15 GTS SQZ Y 25.00 25.67 88 26 4.00 5.6
06/24/15 CUTR SQZ Y 15.12 15.64 92 15.61 3.24 5.49
06/24/15 AFH SQZ Y 19.29 19.57 85 20.295 5.21 5.29
06/22/15 SSNI CwH N 14.19 14.93 94 12.95 -8.74 5.21
06/22/15 BOFI CwH N 102.16 102.68 86 106.49 4.24 4.36
06/23/15 LPCN CwH N 8.08 8.38 91 8.4 3.96 4.33
06/22/15 GTIM SQZ Y 9.50 9.9 97 9.25 -2.63 4.21
06/22/15 FICO SQZ Y 90.46 92.23 90 94.05 3.97 4.06
06/22/15 EYES CwH N 15.67 15.79 84 14.63 -6.64 3.89
06/22/15 CORT CwH N 6.93 7.16 98 5.985 -13.64 3.32
06/25/15 AAWW SQZ Y 56.03 57.78 93 57.6 2.80 3.12
06/23/15 FBR SQZ Y 13.72 14.03 82 14.125 2.95 2.99
06/23/15 CMRX SQZ Y 45.11 46.18 93 46.23 2.48 2.66
06/26/15 PLCE SQZ Y 66.45 68.1 84 68.1 2.48 2.62
06/23/15 EEFT SQZ Y 60.97 62.17 81 62.5 2.51 2.58
06/22/15 CHRS CwH N 27.95 28.65 93 28.31 1.29 2.5
06/23/15 CBPX SQZ Y 23.38 23.96 93 21.93 -6.20 2.48
06/26/15 SPTN SQZ Y 33.06 33.84 92 33.84 2.36 2.45
06/22/15 FRED CwH N 19.52 19.76 84 19.79 1.38 2.41
06/23/15 KNL CwH N 25.28 25.70 88 25.82 2.14 2.41
06/22/15 HQH SQZ Y 35.99 36.59 80 36.26 0.75 2.28
06/22/15 FBT SQZ Y 125.47 127.83 87 125 -0.37 2.19
06/22/15 TSRA SQZ Y 38.80 39.49 87 38.32 -1.24 2.09
06/22/15 RM SQZ Y 18.75 19.04 84 18.13 -3.31 2.08
06/22/15 TBI SQZ Y 30.64 31.27 87 30.93 0.95 2.06
06/26/15 CACC SQZ Y 230.01 233.85 96 233.85 1.67 2.03
06/23/15 IMMR CwH N 12.63 12.72 90 12.52 -0.87 1.98
06/23/15 IIVI SQZ Y 19.17 19.53 90 19.27 0.52 1.88
06/26/15 JBT SQZ Y 37.89 38.5 82 38.5 1.61 1.77
06/24/15 LGIH CwH Y 19.63 19.86 80 19.93 1.53 1.68
06/23/15 MHLD CwH N 15.57 15.60 85 15.79 1.41 1.67
06/23/15 EXAS SQZ Y 30.69 31 94 30.02 -2.18 1.53
06/22/15 NEWT SQZ Y 18.03 18.3 99 17.85 -1.00 1.5
06/25/15 MBLY CwH N 54.60 55.41 81 53.66 -1.72 1.48
06/22/15 HW SQZ Y 19.55 19.81 92 18.99 -2.86 1.48
06/25/15 CCL CwH N 49.92 50.04 82 50.645 1.45 1.46
06/25/15 NXST SQZ Y 57.22 57.73 82 57.9 1.19 1.36
06/26/15 WWWW SQZ Y 23.85 24.15 82 24.15 1.26 1.26
06/23/15 JCOM SQZ Y 69.40 70.23 82 69.75 0.50 1.2
06/23/15 FDP SQZ Y 39.63 40.1 81 39.54 -0.23 1.19
06/23/15 FDEF SQZ Y 36.88 37.25 85 37.16 0.76 1.14
06/23/15 TTPH CwH Y 46.46 46.99 97 44.985 -3.17 1.14
06/24/15 ALDR HTF N 49.27 49.82 99 45.68 -7.29 1.12
06/22/15 MTN SQZ Y 108.43 109.61 86 109.36 0.86 1.09
06/23/15 DHT CwH Y 8.38 8.47 82 8.09 -3.46 1.07
06/26/15 DPZ CwH N 113.86 115.01 90 115.01 1.01 1.01
06/26/15 OPHT SQZ Y 51.59 51.92 82 51.92 0.64 0.97
06/26/15 IIVI SQZ Y 19.09 19.27 90 19.27 0.94 0.94
06/22/15 HCCI CwH N 15.69 15.83 83 15.2 -3.12 0.89
06/22/15 USCR SQZ Y 40.25 40.27 94 39.455 -1.98 0.67
06/23/15 DOOR SQZ Y 70.94 71.39 82 70.88 -0.08 0.63
06/23/15 TLMR CwH N 17.08 17.18 83 16.99 -0.53 0.59
06/26/15 ATSG SQZ Y 10.53 10.56 87 10.56 0.28 0.57
06/25/15 HLF CwH Y 54.80 55.05 87 53.89 -1.66 0.46
06/26/15 MMS SQZ Y 67.09 67.31 91 67.31 0.33 0.45
06/26/15 NXST SQZ Y 57.83 57.9 80 57.9 0.12 0.29
06/25/15 GOGO CwH N 23.10 23.16 84 22.62 -2.08 0.26
06/23/15 LULU CwH N 68.62 68.80 90 67.1 -2.22 0.26
06/26/15 PGC CwH N 22.83 22.87 80 22.87 0.18 0.22
06/26/15 USNA SQZ Y 137.84 138 95 138 0.12 0.22
06/23/15 RHT SQZ Y 79.49 79.62 89 77.49 -2.52 0.16
Weekly Average (68 breakouts) 1.04 3.37
*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

Updated Recommendations for Cup and Handle Chart Pattern Breakouts

Following last week's analysis of the importance of above average volume and positive price movement on the day before breakout, I am updating my recommendations for trading Cup and Handle chart pattern breakouts, last published on 4/25/15 as follows:

For the optimal return (best profit at least risk) from breakouts from our cup with handle watchlist, I now recommend the following trading strategy:
  1. Each day, create a personal watchlist of stocks that satisfy
    • RS Rank must be at least 90
    • Industry Rank must be in the top 60 percentile (i.e. have a rank less than 135 in our industry ranking scheme)
    • Average daily volume >= 100,000.
    • Previous day volume should be above the 50 day average and price must have moved up
  2. Buy on alert (or by placing a stop market order at the breakout price).
  3. Sell at next open if volume at end of breakout day is less than 1.75 times average 50 day volume
  4. Sell if stock drops 6% or more from the breakout price.
  5. After purchase, set a 4% trailing stop by monitoring daily high's and setting a stop loss at 4% of the maximum high after breakout. Adjust daily if necessary.
  6. Sell if trailing stop met intraday. (use a sell stop order).
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 17946.7 -0.38% 0.69% Down
NASDAQ 5080.5 -0.71% 7.27% Up
S&P 500 2101.49 -0.4% 2.07% Down
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones
-0.38 %
NASDAQ Composite
3.87 %
NASDAQ Composite
5.69 %
NASDAQ Composite
7.27 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Tobacco Products - Other Drug Stores Drugs Wholesale Drugs Wholesale
 Most Improved Industry (by change in technical rank2)
Internet Service Providers
+ 48
Tobacco Products - Other
+ 65
Tobacco Products - Other
+ 207
Tobacco Products - Other
+ 204
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 GLUU Glu Mobile Inc. 103
Top Technical GLUU Glu Mobile Inc. 103
Top Fundamental ANET Arista Networks, Inc. 30
Top Tech. & Fund. ANET Arista Networks, Inc. 30
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 DHT DHT Holdings, Inc. 89
Top Technical BOFI BofI Holding, Inc. 36
Top Fundamental MHLD Maiden Holdings, Ltd. 0
Top Tech. & Fund. BOFI BofI Holding, Inc. 36
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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