Breakoutwatch Weekly Newsletter 04/02/16

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Weekly Commentary

New Feature this week: Top 10 cup and handle stocks to watch next week. See below.

The NASDAQ Composite outperformed the two other major indexes with a gain of 3% for the week and recorded three accumulation days compared to only two for the DJI and S&P 500. Unlike the other indexes, however, the index still lags for the year and remains in negative territory. I expect this to change shortly as the index broke through the psychological resistance level of its 50 day moving average on Friday, after two earlier attempts in the week.

NASDAQ Chart
Weekly Breakout Report

Consistent with the usual pattern, Cup and handle stocks delivered the most breakouts and the largest gains, with the exception of a single Head and Shoulders Bottom breakout, DLNG.
Breakouts Summary by Watchlist for Week Beginning 03/28/16
List Breakouts Avg. Gain
CwH 13 2.84
SQZ 10 1.57
HTF 3 2.16
HSB 1 17.46
Breakouts Detail for Week Beginning 03/28/16
Brkout Date Symbol Base Squeeze BrkoutOut Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
03/31/16 DLNG HSB N 9.68 11.39 25 11.37 17.46 18.23
03/31/16 PRMW CwH Y 9.93 10.08 97 10.78 8.56 8.66
03/30/16 TROX HTF N 6.34 6.64 66 6.84 7.89 8.04
03/30/16 SONC CwH N 32.94 34.46 85 35.37 7.38 7.44
03/31/16 BETR CwH N 13.92 14.29 95 14.81 6.39 6.39
03/30/16 KELYA SQZ Y 18.17 18.61 89 19.2 5.67 5.78
03/30/16 LULU CwH N 64.99 67.94 80 68.67 5.66 5.75
04/01/16 TBPH SQZ Y 18.87 19.74 96 19.74 4.61 4.61
03/30/16 CYNO SQZ Y 43.67 43.775 92 44.99 3.02 3.05
03/28/16 LAYN SQZ Y 7.00 7.025 96 7.04 0.57 3
03/29/16 CVCO CwH N 91.16 92.40 92 93.25 2.29 2.54
03/29/16 SSNI CwH N 14.49 14.61 85 14.73 1.66 1.86
03/30/16 X HTF N 16.26 16.48 97 16.46 1.23 1.78
03/28/16 PFO CwH N 11.80 11.92 87 11.79 -0.08 1.61
03/29/16 LBRDK CwH N 57.61 58.21 83 58.45 1.46 1.54
03/29/16 KANG CwH N 21.70 21.70 92 22.01 1.43 1.47
03/30/16 CBNJ SQZ Y 13.35 13.5 94 13.49 1.05 1.2
03/29/16 NAD SQZ Y 14.75 14.75 81 14.89 0.95 0.95
04/01/16 ORI CwH Y 18.31 18.47 86 18.47 0.87 0.93
03/30/16 OIA SQZ Y 7.65 7.68 86 7.71 0.78 0.78
04/01/16 LKQ SQZ Y 31.93 32.115 83 32.115 0.58 0.75
03/29/16 DCT CwH N 39.77 40.02 88 39.92 0.38 0.65
03/31/16 SPB CwH N 108.90 109.31 82 109.51 0.56 0.61
03/30/16 OLED CwH Y 54.68 54.73 88 54.88 0.37 0.51
03/29/16 FR SQZ Y 22.89 22.955 83 22.61 -1.22 0.48
03/31/16 DDD HTF N 15.45 15.49 94 15.04 -2.65 0.32
03/31/16 PZE SQZ Y 6.55 6.55 82 6.53 -0.31 0.31
Weekly Average (27 breakouts) 2.84 3.31
*RS Rank on day before breakout.
New Features This Week

I have dropped two components of the newsletter this week to make way for a new feature which lists the 10 top rated stocks as measured by our best performing criteria set out in our Revised Rules for Trading Cup and Handle Breakouts.
You'll find this list as the  last entry in the newsletter.

The  two components I dropped were the top rated stocks and best second chances based on my expected gain model. I dropped  them because after evaluating the expected gain model for 2015 to date, I concluded that the  model had  no value.
 
Top Tip of the Week

Rare but Beautiful


The best performing cup and handle stock for the week was PRMW which had a well shaped handle and was coincidentally in a squeeze. The combination of a handle squeeze and cup and handle pattern can produce some  of the most rewarding short term breakouts as I showed in Breakouts from a Cup and Handle Pattern with Volatility Squeeze Provide Best Breakout Day Pop.

The handle squeeze is a comparatively rare situation,  but is usually rewarding.

PRM handle squeeze
Major Index Summary
Index Value Change Week Change YTD Trend1
Dow 17792.8
2.11% 2.11% Up
NASDAQ 4914.54
2.95% -1.85% Up
S&P 500 2072.78
1.41% 1.41% Up
1The Market Trend 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.
Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
3.1 %
Dow Jones
3.75 %
Dow Jones
8.02 %
Dow Jones
2.11 %
Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Silver Silver Water Utilities Auto Parts Stores
Most Improved Industry (by change in technical rank2)
1 Week 3 Weeks 13 Weeks 26 Weeks
Electronics Wholesale + 54 Copper + 136 Silver + 186 Silver + 200
Charts of each industry rank and performance over 12 months are available on the site
Top 10 Cup and Handle Stocks as of Friday April 1
Symbol BO
Price
BO
Vol.
Company Industry RS
Rank
Last
Close
USCR 63.07 475,956 U S Concrete - Inc. General Building Materials 97 61.82
FIZZ 43.80 168,670 National Beverage Corp. Beverages - Soft Drinks 97 43.67
LITE 27.25 1,005,718 Lumentum Holdings Inc. Money Center Banks 96 26.59
SNC 13.20 209,745 State National Companies - Inc. Property & Casualty Insurance 96 12.71
MGPI 26.43 140,422 MGP Ingredients - Inc. Processed & Packaged Goods 96 24.39
PSAU 18.52 56,148 PowerShares Global Gold & Precious Metals Closed-End Fund - Equity 96 17.39
TX 18.76 538,275 Ternium S.A. Steel & Iron 95 18.23

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