Breakoutwatch Weekly Summary 01/25/20
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|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.
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.
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.
No new features this week
Our latest strategy suggestions are here.
|Brkout Date||Symbol||Base||Squeeze||Brkout Price||Brkout Day Close||RS Rank*||Last Close||Current % off BOP||Gain at Intraday High|
|*RS Rank on day before breakout.|
|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
|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|
|REIT - Specialty
|Charts of each industry rank and performance over 12 months are available on the site|
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