Breakoutwatch Weekly Summary 02/16/19

You are receiving this email because you are or were a subscriber, or have subscribed to our weekly newsletter. This newsletter summarizes the breakout events of the week and provides additional guidance that does not fit into our daily format. It is published each weekend.

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

Weekly Commentary
NASDAQ Attempts Breakout from Cup and Handle Pattern but Meets Resistance at 200 DMA

The NASDAQ (up 2.4%) and other major indexes had a strong week as China trade talks appeared to be moving forward and a Government shutdown was avoided. A slump in retail sales in December was mostly discounted as aberrant as they appeared to show a  3.9% fall in online sales which no one believed.

The NASDAQ attempted to breakout from a cup and handle pattern on Wednesday on less than average volume, but as can be seen from the chart below, it failed to breakthrough resistance at the 200 daily moving average level. The low volume throughout the week indicates there is still some caution among traders and the direction of the NASDAQ is uncertain.

We continue to measure a successful cup and handle breakout as requiring a 50% volume increase over the 50 DMA as well as closing above the breakout price. For the Volatility Squeeze pattern we only require that the volume 50 dma be met. By these criteria it is not surprising that the number of new breakouts,17, was below last weeks count of 22 due to the falloff in volume.


New Features this Week

No new features this week
Strategy Suggestions
New Strategies Under Development - Continued

I spent this week thoroughly examining the backtest code to ensure that the results based on a backtest of the possible new 'Buy on Breakout Alert' and 'Buy on Confirmed Breakout' strategies were sound. I did find a bug and I'm correcting the data published last week accordingly. While not quite so impressive, I think they still look damned good!

2018 Strategy Results
2018 Strategy Results
(Revised Suggestions)
Buy on Breakout Alert
27.5% 324%   96.4%
Buy on Confirmed Breakout
12.9% 51%   35%

The next step is to publish rules for the application of these new strategies. Today, I'm going to focus on the 'Buy on Confirmed Breakout' strategy which I'm going to call simply the "Buy at Open" strategy as it doesn't actually require the breakout to be confirmed on volume. It's also the strategy that is easiest to implement as it doesn't require following the market in real time. I'll develop rules for the other strategy in the near future.

The 'Buy on Breakout' Strategy is explained here.

You will see that I intend to publish each day two stocks that meet the Buy at Open trade criteria. This will be done, at least initially, by email to Test Drive and Platinum subscribers. This will begin after the site has analyzed the day's trading results on Tuesday, February 19. This email will also include the trailing stop values to applied next day for symbols that have already been, theoretically, bought under the strategy.

I'm also working on a report that will show progressively trades made under the strategy and performance of the portfolio.

If you have questions about this strategy, YOU MUST post them to the Support Forum. I will only answer questions there to avoid repetition.

Breakouts Summary by Watchlist for Week Beginning 02/11/19
List Breakouts Avg. Gain
CWH 13 6.66
SQZ 4 2.38
Breakouts Detail for Week Beginning 02/11/19
Brkout Date Symbol Base Squeeze Brkout Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
2019-02-11 CNST CWH n 9.56 9.69 95 11.93 24.79% 30.23%
2019-02-11 GTLS CWH n 77.22 80.15 91 88.16 14.17% 15.88%
2019-02-12 TNDM CWH y 46.00 46.45 99 51.5 11.96% 13.07%
2019-02-11 CWST CWH y 31.89 32.03 85 35.03 9.85% 10.07%
2019-02-11 NSC SQZ y 171.47 176.95 80 182.88 6.65% 6.86%
2019-02-11 TARO SQZ y 98.97 104.28 81 105.15 6.24% 8.05%
2019-02-12 CRBP CWH y 8.50 8.57 93 8.95 5.29% 7.18%
2019-02-12 ENSG CWH n 49.99 50.75 95 52.19 4.4% 4.46%
2019-02-13 NVTA CWH n 15.42 15.65 98 16.08 4.28% 5.38%
2019-02-15 BL CWH n 49.48 51.49 92 51.49 4.06% 7.03%
2019-02-11 SE CWH n 15.38 15.51 93 16 4.03% 5.14%
2019-02-11 QURE CWH n 36.80 37.22 96 37.46 1.79% 8.29%
2019-02-15 VIAV CWH n 12.67 12.8 91 12.8 1.03% 1.03%
2019-02-11 OTTR SQZ y 49.90 50.02 83 50.23 0.66% 1.4%
2019-02-15 LLY CWH y 121.84 122.48 93 122.48 0.53% 0.53%
2019-02-11 REPH CWH n 8.63 8.74 81 8.67 0.46% 2.76%
2019-02-11 TRIP SQZ y 59.21 59.54 89 56.81 -4.05% 2.52%
*RS Rank on day before breakout.
Top Rated Cup and Handle Stocks as of Friday February 15, 2019
Symbol BO
Company Industry RS
No stocks met 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 25883.2
3.09% 10.96% Up
NASDAQ 7472.41
2.39% 12.62% Up
S&P 500 2775.6
2.5% 10.72% Up
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.
Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones NASDAQ Composite
1.85 %
Dow Jones
0.83 %
NASDAQ Composite
12.62 %
Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Foreign Utilities
Foreign Utilities
Foreign Utilities
Auto Parts Stores
Most Improved Industry (by change in technical rank2)
Security Software & Services
Music & Video Stores
Music & Video Stores
Charts of each industry rank and performance over 12 months are available on the site


If you received this newsletter from a friend and you would like to receive it regularly please go to the site and you will then be able to register to receive the newsletter.

Copyright (c) 02/16/2019 NBIcharts, LLC dba All rights reserved.
" BreakoutWatch," the "eye" logo, and the slogan "tomorrow's breakouts today" are service marks of NBIcharts LLC. All other marks are the property of their respective owners, and are used for descriptive purposes only.

BreakoutWatch is not affiliated with Investor's Business Daily or with Mr. William O'Neil. Our site, research and analysis is supported entirely by subscription and is free from advertising.