Breakoutwatch Weekly Summary 01/25/20

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Weekly Commentary
Profit Taking after Health Fears; Volatility Squeeze Tutorial

The major indexes set further new highs on Wednesday but fears that the spread of the coronavirus would slow economic activity led to profit taking on Friday in a market that was already fearing stocks were overvalued. The NASDAQ gave up 0.8% for the week but fared better than the DJI which slipped 1.2% and the S&P 500 1%.


Volatility Squeeze (SQZ) breakouts substantially outperformed those from the cup and handle pattern with an average gain of 5.3%. We examine the best performer below.

Chart of the Week

Volatility Squeze Breakout of XPEL

A Volatility Squeeze (SQZ) occurs when the volatility of a stock falls below previous values. It is recognized when the Keltner channel falls within the Bollinger Bands. The importance of the squeeze is that it is expected that sooner or later volatility will increase and the 'squeeze' will end resulting either in a price move higher or lower. We look for squeeze situations where the price is likely to move higher by firstly recognizing a squeeze and then requiring that momentum must be positive and increasing. If so, the stock is placed on the Volatility Squeeze watchlist.

XPEL first appeared on the SQZ list on Jan 15 Volume moved above the 50 day average on the 21st indicating the stock was under accumulation and the breakout occurred the next day.

SQZ Breakout XPEL

Increasing volume is a sign that a breakout may be in the near future. This can be recognized by setting filters on the watchlist to look for stocks under accumulation with above average volume. This filter would have selected XPEL on Jan 21and an alert would be sent the next day.

SQZ filters

New Features this Week

No new features this week
Strategy Suggestions
Our latest strategy suggestions are here.
Breakouts Summary by Watchlist for Week Beginning 01/20/20
List Breakouts Avg. Gain
CWH 4 -0.17
SQZ 5 5.3
Breakouts Detail for Week Beginning 01/20/20
Brkout Date Symbol Base Squeeze Brkout Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
2020-01-22 XPEL SQZ y 15.40 16.35 94 16.85 9.42% 16.82%
2020-01-22 EYE SQZ y 33.79 35.04 82 36.76 8.79% 13.97%
2020-01-23 EYE SQZ y 35.05 35.57 86 36.76 4.88% 9.87%
2020-01-24 TEAM CWH n 140.49 146.79 80 146.79 4.48% 7.19%
2020-01-23 RMBS CWH y 14.57 14.78 81 14.94 2.54% 3.57%
2020-01-22 NWPX SQZ y 33.58 33.85 86 34.36 2.32% 6.19%
2020-01-24 PCYO SQZ y 12.82 12.96 81 12.96 1.09% 1.79%
2020-01-22 STNE CWH n 43.57 44.64 92 43.15 -0.96% 4.38%
2020-01-23 HOOK CWH n 12.93 13.8 90 12.06 -6.73% 11.11%
*RS Rank on day before breakout.
Top Rated Cup and Handle Stocks as of Friday January 24, 2020
Symbol BO
Company Industry RS
NERV 9.23 659,564 Minerva Neurosciences - Inc Biotechnology 93 8.01
HABT 14.10 790,880 The Habit Restaurants - Inc. - Class A Common Stock Restaurants 93 13.95
VNET 11.25 574,101 21Vianet Group - Inc. - American Depositary Shares Information Technology Services 87 10.28
MAT 14.74 5,257,852 Mattel - Inc. Leisure 85 14.28
COOP 14.12 763,530 Mr. Cooper Group Inc. Specialty Finance 84 12.86
AAOI 15.98 1,003,854 Applied Optoelectronics - Inc. Semiconductors 84 13.96
CYTK 13.27 1,263,918 Cytokinetics - Incorporated Biotechnology 83 12.01
TERP 17.54 1,858,560 TerraForm Power - Inc. - Class A Common Stock New Utilities - Diversified 83 17.31
SONO 15.98 2,507,373 Sonos - Inc. Consumer Electronics 82 14.06
SY 14.89 885,963 So-Young International Inc. - American Depository Health Information Services 81 13.15
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 28989.7
-1.22% 1.58% Up
NASDAQ 9314.91
-0.79% 3.82% Up
S&P 500 3295.47
-1.03% 2% 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
NASDAQ Composite
-0.79 %
NASDAQ Composite
13 %
NASDAQ Composite
11.82 %
NASDAQ Composite
3.82 %
Best Performing Industry
1 Week 3 Weeks 13 Weeks 26 Weeks

Most Improved Industry (by change in technical rank2)
REIT - Specialty



Charts of each industry rank and performance over 12 months are available on the site


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