Breakoutwatch Weekly Summary 11/21/20

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Weekly Commentary
Large Cap Stocks Lose their Glamor; Is 1.5 times ADV a Suitable Breakout Metric?

The promise of at least 2 vaccines being available in the relatively near future turned traders attention to cyclical/value stocks which have been undervalued but can expect to benefit from an improving economy. Of the three major indexes, only the NASDAQ managed a small gain of 0.2%. In contrast, the Russell 2000 gained 2.4%.

As can be seen in the NASDAQ chart, the index moved mostly sideways so the number of breakouts was quite restrained with only modest gains. See the Breakouts summary below. Also, see New Features for an analysis of the meaningfulness of our breakout volume metric.
Chart of the Week
chart PACK

New Features this Week
Breakout Volume No Longer Required for "Breakout" Designation

Not exactly a new feature, but I'm announcing a change that I will be implementing in the next few days. In future I will not use the 'breakout volume' requirement on the Cup and Handle Pattern Watchlist, and will not report a breakout failure if the breakout volume requirement is not met. The reason for this change is explained in a paper I've written called "Is Breakout Day Volume Significant for Medium Term Success?".

The paper concludes: "being focused solely on stocks that meet our 'breakout price and volume' criteria misses the vast majority of stocks that meet the breakout price but don't meet the breakout volume requirement, but nevertheless are viable candidates."

There are a number of pages and reports that refer to, or use, the breakout volume criterion so it will take a few days to complete the revisions.
Strategy Suggestions
Our latest strategy suggestions are here.
Breakouts Summary by Watchlist for Week Beginning 11/16/20
List Breakouts Avg. Gain
CWH 3 0.87
SQZ 6 7.19
Breakouts Detail for Week Beginning 11/16/20
Brkout Date Symbol Base Squeeze Brkout Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
2020-11-18 IPWR SQZ y 6.55 6.6 94 7.9 20.61% 32.82%
2020-11-17 VFF CWH n 6.65 8.1 83 7.99 20.15% 25.26%
2020-11-18 LMB SQZ y 9.89 11.14 98 11.49 16.18% 19.31%
2020-11-18 SOHU SQZ y 19.17 19.45 91 19.74 2.97% 5.37%
2020-11-16 SEED SQZ y 9.86 10.18 82 10 1.42% 4.06%
2020-11-16 USAK SQZ y 9.66 10.06 86 9.78 1.24% 10.77%
2020-11-16 HZN SQZ y 6.83 7.14 96 6.88 0.73% 5.12%
2020-11-16 WRK CWH n 42.38 42.55 81 42.59 0.5% 5.36%
2020-11-16 IQ CWH n 27.57 27.77 82 22.6 -18.03% 1.67%
*RS Rank on day before breakout.
Top Rated Cup and Handle Stocks as of Thursday November 19, 2020
Symbol BO
Company Industry RS
PRTK 6.33 855,806 Paratek Pharmaceuticals - Inc. Biotechnology 91 6.15
AMAG 13.76 3,176,676 AMAG Pharmaceuticals - Inc. Biotechnology 89 13.75
RESI 13.69 1,562,830 Front Yard Residential Corporation REIT - Residential 87 13.39
FSM 8.11 5,508,038 Fortuna Silver Mines Inc Silver 87 6.32
CBB 15.35 595,078 Cinci Telecom Services 86 15.26
SLM 11.18 6,098,458 SLM Corporation Credit Services 84 10.91
OVID 6.43 880,418 Ovid Therapeutics Inc. Biotechnology 83 6.11
DTIL 10.10 984,148 Precision BioSciences - Inc. Biotechnology 80 9.68
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 29263.5
-0.73% 2.54% Up
NASDAQ 11855
0.22% 32.12% Up
S&P 500 3557.54
-0.77% 10.11% 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
Utilities - Renewable
Grocery Stores

Most Improved Industry (by change in technical rank2)
Travel Services
Travel Services
Luxury Goods
Luxury Goods
Charts of each industry rank and performance over 12 months are available on the site


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