Breakoutwatch Weekly Summary 09/30/17
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| New Features this Week
| Top Cup and Handle Chart Pattern Stocks
| Best Performing Index
Best Performing Industry
Most Improved Industry
|New Highs and Strong Breakouts
The three major indexes all made new highs this week with the NASDAQ outperforming the others with a 1.1% gain despite a negative beginning on Monday. Wednesday produced an accumulation day as investors reacted positively to the budget framework that promised corporate tax cuts and by extension further improved corporate profits. Friday also produced an accumulation day as inflation fell, GDP growth for third quarter came in at 3.1% year-on-year and consumer spending rose 3.3%.
The number of breakouts continued at a healthy level with cup and handle pattern stocks (21) delivering an average gain of 3.6% and Volatility Squeeze stocks (6) averaging 4.5%. High relative strength (RS) stocks performed well as I have continued to emphasis in my suggested strategy. While some lower RS stocks can occasionally outperform, such as MTRN (see below), they have a lower probability of success and are therefore a higher risk trade than those with an RS above our suggested minimum level of 94.
The move to the new server did not proceed last weekend but will occur later today. Please advise me (email@example.com) if you find anything is not working as before.
Getting reliable real time data for the three major indexes has proved challenging over the last 2 weeks and so the major index chart displays on the alerts page has been either intermittent, missing or incorrect. I hope to have corrected that now.
Our latest strategy suggestions are here.
Relative Strength Rank Explained
RS Rank is a measure of a stock's price performance vs. all other stocks and ETF's in our database (currently 7494). The change in each stock's price for each of the previous four quarters is used to derive a weighted price performance for each stock, with the most recent quarter given the highest weight This weighted price performance is then used to rank all stocks against each other. Each stock is then given an RS Rank from 99 (highest) to 1 (lowest). A rank of 99 means that a stock is in the top 1% of all stocks on a price performance basis. This value is updated daily, so it is a dynamic indicator of relative performance against all other stocks given the latest closing prices.
In general, strong stocks remain strong. My analysis of cup and handle breakouts over more than 10 years of data shows that an RS rank over 90 (meaning that a stock is in the top 10% of price performance over the last year) tend to give the most breakouts, with those at or above an RS rank of 94 delivering the strongest performance. This week's breakouts illustrate the point:
|List||Breakouts||Avg. Gain %|
|Brkout Date||Symbol||Base||Squeeze||BrkoutOut Price||Brkout Day Close||RS Rank*||Last Close||Current % off BOP||Gain at Intraday High|
|*RS Rank on day before breakout.|
|INTT||8.45||91,077||inTest Corporation Common Stock||Semiconductor - Integrated Circuits||96||8.30|
|AXTI||9.25||872,610||AXT Inc - Common Stock||Semiconductor - Integrated Circuits||96||9.15|
|GNBC||24.00||316,228||Green Bancorp - Inc. - Common Stock||Money Center Banks||95||23.65|
|MMSI||42.60||512,544||Merit Medical Systems - Inc. - Common Stock||Medical Instruments & Supplies||94||42.35|
|COHR||281.00||759,050||Coherent - Inc. - Common Stock||Scientific & Technical Instruments||94||235.17|
|FONR||31.20||56,838||Fonar Corporation - Common Stock||Medical Appliances & Equipment||93||30.50|
|MNTX||9.49||96,030||Manitex International - Inc. - common stock||Diversified Machinery||92||8.98|
|These stocks meet our suggested screening factors
for our Cup and Handle Chart Pattern watchlist.
See Revised Rules for Trading Cup and Handle Breakouts
|Index||Value||Change Week||Change YTD||Trend1|
1The Market Trend is derived from our proprietary market model. The market model is described on the site here.
2The site also shows industry rankings based on fundamentals, combined technical and fundamentals, and on price alone. The site also shows daily industry movements.
|1 Week||13 Weeks||26 Weeks||Year-to-Date|
|1 Week||3 Weeks||13 Weeks||26 Weeks|
||Resorts & Casinos
|Diversified Computer Systems
|Charts of each industry rank and performance over 12 months are available on the site|
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