Breakoutwatch Weekly Summary 04/18/20

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Weekly Commentary
Trend Signals are Positive for Major Indexes

Our NASDAQ Comp., DJI and S&P 500 trend signals turned positive this week. The NASDAQ is in the strongest position with the index being above both its 200 day and 50 day moving averages, but neither the DJI or S&P are in such a strong position. The strength of the rally is really quite surprising considering the state of the economy, and may represent an overly optimistic view that earnings will soon return to pre-covid levels. Consider this summary from of the economic news this week:
  • The nation's largest banks, including JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), and Wells Fargo (WFC), recorded huge increases in their provisions for credit losses as they readied themselves for a possible wave of charge-offs.
  • The May contract for WTI crude futures plummeted 21.8% to $18.14/bbl.
  • Retail sales declined 8.7% m/m in March, which is the largest drop on record.
  • Industrial production declined 5.4% m/m in March, which was the worst downturn since 1946.
  • The Empire State Manufacturing Survey plummeted to -78.2, which is its lowest level on record.
  • The Philadelphia Fed Index dropped to -56.6, which was its lowest reading since July 1980.
  • The NAHB Housing Market Index, which is a gauge of homebuilder sentiment, plunged to 30.0 for April (a record low) from 72.0 in March.
  • Housing starts declined 22.3% m/m in March to a seasonally adjusted annual rate of 1.216 million units, marking the biggest drop since March 1984.
  • The Leading Economic Index for March declined 6.7% m/m, which was the worst decline in the 60-year history of the index.
  • The Paycheck Protection Program reached its $350 billion limit, leaving millions of small business owners in need of support.
  • Initial claims for the week ending April 11 totaled 5.245 million, bringing the four-week total for initial claims to 22.034 million. Continuing claims for the week ending April 4 hit a record 11.976 million.
As earnings season proceeds, it is likely that forward guidance will temper some of the market's optimism, so I am personally rather cautious and expect a correction before too long.

Chart of the Week
I applied my preferred filter (above average volume and under accumulation) to our cup and handle watchlist and found 4 stocks that met the criteria. I then used the Chart Browser to examine the charts of each and found the chart for NIC to be the most interesting. NIC provides digital services to Federal, State and local governments and was recently highlighted by IBD as a coronavirus stock to watch.

NIC chart


New Features this Week

No new features this week
Strategy Suggestions
Our latest strategy suggestions are here.
Breakouts Summary by Watchlist for Week Beginning 04/13/20
List Breakouts Avg. Gain
CWH 4 2.35
SQZ 4 -0.97
Breakouts Detail for Week Beginning 04/13/20
Brkout Date Symbol Base Squeeze Brkout Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
2020-04-13 FENC SQZ y 6.47 7.23 95 6.99 8.04% 23.49%
2020-04-14 QTS CWH n 61.33 63.51 94 64.13 4.57% 6.24%
2020-04-16 WERN CWH n 39.23 39.35 91 40.11 2.24% 3.21%
2020-04-13 CTSO CWH n 7.73 8 96 7.84 1.42% 21.6%
2020-04-16 SLGN CWH n 32.66 33.4 89 33.04 1.16% 3.97%
2020-04-15 ARCE SQZ y 46.12 47.39 88 45.89 -0.5% 5.51%
2020-04-15 LAKE SQZ y 16.51 17.2 96 16.12 -2.36% 9.02%
2020-04-14 STSA SQZ y 19.29 20.04 96 17.54 -9.07% 8.86%
*RS Rank on day before breakout.
Top Rated Cup and Handle Stocks as of Friday April 17, 2020
Symbol BO
Company Industry RS
FIT 6.80 12,154,641 Fitbit - Inc. Class A Common Stock Scientific & Technical Instruments 95 6.67
EGO 9.51 7,119,194 Eldorado Gold Corporation Ordinary Shares Gold 94 8.31
GFI 7.43 15,220,576 Gold Fields Limited American Depositary Shares Gold 93 6.35
AGI 7.60 6,075,838 Alamos Gold Inc. Class A Common Shares Gold 92 6.38
AQN 14.53 1,704,741 Algonquin Power & Utilities Corp. Common Shares Utilities - Renewable 89 14.10
TEVA 10.66 35,243,912 Teva Pharmaceutical Industries Limited American De Drug Manufacturers - Specialty & Generic 89 10.27
AKTS 8.11 994,653 Akoustis Technologies - Inc. - Common Stock Communication Equipment 86 7.56
EQX 8.05 1,906,204 Equinox Gold Corp. Common Shares Gold 85 7.41
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 24242.5
2.21% -15.05% Up
NASDAQ 8650.14
6.09% -3.59% Up
S&P 500 2874.56
3.04% -11.03% 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 NASDAQ Composite
NASDAQ Composite
NASDAQ Composite
Best Performing Industry
1 Week 3 Weeks 13 Weeks 26 Weeks
Shell Companies
Shell Companies

Most Improved Industry (by change in technical rank2)
Other Precious Metals & Mining
Grocery Stores
Charts of each industry rank and performance over 12 months are available on the site


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