Breakoutwatch Weekly Summary 07/13/19

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Weekly Commentary
Volatility Squeeze Breakout Backtest Available Again - Possible 84% gain in 2019

The NASDAQ started the week retreating from last Friday's high but was rejuvenated by Fed Chairman Powell's comments on Wednesday that were taken to mean that a rate cute of at least 0.25% will be made by the FOMC on July 31. The index continued to move upwards and closed at another new high on Friday, up 1%,  although the move up was bested by the DJI that gained 1.5% which benefited from a 4.8% increase in oil prices. has an alternative take on the possibility of a rate cut as core inflation is rising:
Fed officials have been pointing to weakening inflation metrics to justify the growing hopes for a rate cut, but economic data released this week showed a larger than expected increase in Core CPI (actual 0.3%; consensus 0.2%) and Core PPI (actual 0.3%; consensus 0.3%) in June. On a yr/yr basis, core CPI is up 2.1% while core PPI is up 2.3%. Meanwhile, the Fed's preferred inflation gauge, core PCE, increased 1.7% yr/yr in Q1, which is a faster rate than what was seen when the central bank began raising rates at the end of 2015 (1.2%).

The upward price moves were not matched by an increase in volumes, as is typical in the summer months, and so the number of confirmed breakouts fell to just 4.


New Features this Week

Our Volatility Squeeze Backtest has been unavailable for some time as the data source for running the backtest was corrupted. I have corrected that now and the backtest is again available.

The image below shows a sample backtest run for 2019 using a tight trailing stop (3%) and a modest target gain of 10%. This results in limiting losses and taking profits early. The backtest shows a potential profit of 84%.

Click on the image to see a full screen version and notice the constraints on the backtest. In summary
  • Buy on breakout if Industry in top 50% of our industry technical ranking
  • Sell at next open if breakout not sustained at market close (above BoP and 50 day average volume)
  • Each day, set a trailing stop of 3% from last close
  • Set a sell order for 10% above breakout price

SQZ not greedy!
Strategy Suggestions
Our latest strategy suggestions are here.
Breakouts Summary by Watchlist for Week Beginning 07/08/19
List Breakouts Avg. Gain
CWH 3 -1.15
SQZ 1 -3.47
Breakouts Detail for Week Beginning 07/08/19
Brkout Date Symbol Base Squeeze Brkout Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
2019-07-09 IPHI CWH n 54.11 54.81 95 58.75 8.58% 9.06%
2019-07-08 VEC CWH n 42.77 43.92 96 41.96 -1.89% 8.74%
2019-07-11 TNDM SQZ y 65.99 67.11 98 63.7 -3.47% 6.68%
2019-07-08 CIR CWH n 47.10 47.22 93 42.32 -10.15% 1.49%
*RS Rank on day before breakout.
Top Rated Cup and Handle Stocks as of Friday July 12, 2019
Symbol BO
Company Industry RS
CRMD 9.99 648,447 CorMedix - Inc. Biotechnology 99 8.95
ZYNE 15.70 3,503,988 Zynerba Pharmaceuticals - Inc. Drugs - Generic 99 13.64
SNCR 8.56 634,653 Synchronoss Technologies - Inc. Application Software 94 8.11
VCEL 19.90 856,728 Vericel Corporation Biotechnology 93 19.83
BBD 10.55 18,685,378 Banco Bradesco S.A. Foreign Regional Banks 93 10.19
SNR 7.07 719,847 New Senior Investment Group Inc. Processing Systems & Products 92 6.87
MOBL 6.39 1,388,540 MobileIron - Inc. Application Software 90 6.23
AG 8.25 4,718,446 First Majestic Silver Corp. Silver 87 7.80
BKS 6.95 4,052,346 Barnes & Noble - Inc. Specialty Retail - Other 87 6.69
TACO 13.49 609,564 Del Taco Restaurants - Inc. Restaurants 84 12.84
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 27332
1.52% 17.17% Up
NASDAQ 8244.14
1.01% 24.25% Up
S&P 500 3013.77
0.78% 20.22% 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 S&P 500
3.26 %
NASDAQ Composite
18.26 %
NASDAQ Composite
24.25 %
Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Insurance Brokers
Insurance Brokers
Foreign Utilities
Auto Parts Stores
Most Improved Industry (by change in technical rank2)
Home Health Care
Agricultural Chemicals
Manufactured Housing
Music & Video Stores
Charts of each industry rank and performance over 12 months are available on the site


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