Breakoutwatch Weekly Summary 11/26/16

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New Features this Week
Strategy Suggestions
Breakouts Summary
Breakouts Detail
Top Cup and Handle Chart Pattern Stocks
Breakouts Index
Major Indexes Performance
Best Performing Index
Best Performing Industry
Most Improved Industry

Weekly Commentary
A Theory of Why Prices are Rising while Volume is Falling

The three major indexes and the Russell 2000 all set new highs this week but as our chart for the NASDAQ shows, they did so on declining volume that was well below the 50 day average. This is the second week in succession that we have seen this unusual situation.

Normally, a rising market is accompanied by rising volume as buyers enter the market and push prices higher. A rising market on lower volume is usually a sign that the trend is weakening as the number of buyers decreases while sellers hold on to their positions. Looking at the chart below, there is no indication that the trend is weakening, despite the falling volume. Note that even on Friday the NASDAQ closed at a new high, despite truncated trading on a holiday weekend. So how can we interpret this anomalous behavior?

The law of supply and demand says that if supply is scarce then goods become more expensive. Therefore a scarcity of sellers would cause buyers to bid prices higher to persuade the sellers to part with their holdings. So why would we have a scarcity of sellers in the current market? Well, it's generally believed that the Trump economy will deliver a massive stimulus in the form of tax cuts and infrastructure spending which will deliver higher corporate profits, but not until next year. So if you believe prices will rise substantially in the future then why sell today? So there you have it,  there's a scarcity of sellers because institutions are betting that values will be much higher in the future.


As was the case last week, lower average volumes lead to fewer confirmed breakouts as our algorithms require above average volume to confirm a breakout.

New Features this Week

No new features this week.
Strategy Suggestions

Our latest strategy suggestions are 
here and here.
Breakouts Summary by Watchlist for Week Beginning 11/21/16
List Breakouts Avg. Gain
CWH 6 6.71
SQZ 1 10.57
HTF 1 1.24
Breakouts Detail for Week Beginning 11/21/16
Brkout Date Symbol Base Squeeze BrkoutOut Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
2016-11-22 CLF CWH n 7.85 9 99 9.91 26.24% 26.62%
2016-11-21 STML SQZ y 12.21 14 98 13.5 10.57% 14.66%
2016-11-22 CNSL CWH n 27.96 29 80 29.49 5.47% 6.37%
2016-11-23 AQMS CWH n 12.76 13 97 13.18 3.29% 9.33%
2016-11-22 RUSHA CWH n 28.54 30 87 29.41 3.05% 3.82%
2016-11-23 DTYS CWH n 19.09 19 84 19.59 2.62% 3.4%
2016-11-23 MPO HTF y 20.11 20 99 20.36 1.24% 1.94%
2016-11-21 ETE CWH n 17.37 18 90 17.3 -0.4% 15.08%
*RS Rank on day before breakout.
Top Rated Cup and Handle Stocks as of Friday November 25, 2016
Symbol BO
Company Industry RS
MGI 11.03 205,227 Moneygram International - Inc. Credit Services 95 10.87
JOY 28.14 1,768,954 Joy Global Inc. Farm & Construction Machinery 95 28.07
LITE 42.50 1,528,092 Lumentum Holdings Inc. Money Center Banks 95 41.20
CORR 32.75 247,608 CorEnergy Infrastructure Trust - Inc. Asset Management 95 32.64
PCYG 14.60 91,292 Park City Group - Inc. Business Software & Services 93 14.20
ETE 18.02 8,699,116 Energy Transfer Equity - L.P. Oil & Gas Pipelines 92 17.29
These stocks meet our suggested screening factors for our Cup and Handle Chart Pattern watchlist.
See Revised Rules for Trading Cup and Handle Breakouts
Major Index Summary
Index Value Change Week Change YTD Trend1
Dow 19152.1
1.51% 9.91% Up
NASDAQ 5398.92
1.45% 7.82% Up
S&P 500 2213.35
1.44% 8.29% Up
1The Market Trend is derived from our proprietary market model. The market model is described on the sitehere.
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
Dow Jones Dow Jones
3.45 %
NASDAQ Composite
9.43 %
Dow Jones
9.91 %
Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Regional - Southwest Banks
Sporting Goods Stores
Manufactured Housing
Most Improved Industry (by change in technical rank2)
Music & Video Stores
Basic Materials Wholesale
Dairy Products
Manufactured Housing
Charts of each industry rank and performance over 12 months are available on the site


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