Breakoutwatch Weekly Summary 01/07/22

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I wish all my readers a safe and prosperous 2022

NASDAQ Testing Support Levels. Beta Android App Released

The NASDAQ tested support levels on Friday and closed the week with a 4.5% loss. The mega cap tech stocks are now 7% below their high, as measured by the MGK etf. explains the downturn as follows:
The growth-stock weakness was linked to the rise in the 10-yr yield, which hit 1.80% on Friday after starting the week at 1.51%. The first 12-basis-point increase didn't deter risk sentiment, though, evident in the S&P 500 setting record highs to start the week and Apple (AAPL) reaching the $3.0 trillion market capitalization.

The persistent advance to 1.80%, however, was unsettling and opened the door for 2.00%. The increased likelihood for a higher interest-rate environment this year contributed to the rotation into value stocks, even after a broad-based decline following the December FOMC Minutes on Wednesday.

The FOMC Minutes showed that participants thought it would be appropriate to reduce the size of the Fed's balance sheet at a faster pace than during the previous normalization period, as well as starting closer to the first rate hike than last time. Part of the reasoning was the economic outlook is stronger and the balance sheet is simply a lot bigger now.

Expectations for a more assertive Fed were supported by the Employment Situation report for December, which depicted a tight labor market with strong wage gains and near-max employment.
The implication being that there may be more pain ahead. Our trend indicators are negative across all three major indexes.
Better Prospects for Breakouts

The rotation into value stocks, which are mostly not near their all time highs, could provide more profitable breakout opportunities as there is more upside potential. There were 17 breakouts this week that gained more than 5%. See the table below.
Chart of the Week
Prime Energy Resources was a possible breakout pick on December 31 and broke out on January 3. A new pivot was set on Jan. 4 and profit taking followed. It has now formed a new handle and closed on Friday just 0.7% below the new pivot. Buy volume was above average on Jan. 6 but Friday's hanging man doji on low volume indicates an imminent breakout is doubtful. For alternative possible breakouts, see "CwH Stocks Likely to Close above BoP at Next Session* " below.
PNRG Chart
New Features this Week
Beta Android App Released.

You can now download a Breakoutwatch App to your Android smart phone. The App is still under development and not yet ready for the Google Play Store but you can try it out now.

Instructions for the installation are here.

An iPhone version will follow soon.

Strategy Suggestions
Our latest strategy suggestions are here.
Breakouts Summary by Watchlist for Week Beginning 01/03/22
List Breakouts Avg. Gain
CWH 6 1.89
SQZ 38 3.59
Breakouts Gaining at Least 5% for Week Beginning 01/03/22
Brkout Date Symbol Base Squeeze Brkout Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
2022-01-03 VNOM SQZ y 21.32 22.44 89 25.26 18.48% 21.39%
2022-01-03 KRP SQZ y 13.64 14.95 86 15.38 12.76% 15.82%
2022-01-04 VNOM SQZ y 22.45 23.99 92 25.26 12.52% 15.28%
2022-01-04 KEY SQZ y 23.59 24.82 83 26.35 11.7% 12.12%
2022-01-04 ESTE CWH n 11.93 12.36 93 13.15 10.23% 14.5%
2022-01-04 FITB SQZ y 44.68 46.57 86 48.8 9.22% 9.56%
2022-01-04 TX SQZ y 44.58 45.71 84 48.28 8.3% 9.83%
2022-01-04 PACW SQZ y 46.25 47.55 87 49.9 7.89% 8.98%
2022-01-04 MVO CWH n 8.89 8.91 97 9.48 6.64% 6.86%
2022-01-04 BAC SQZ y 46.19 47.99 85 49.18 6.47% 6.75%
2022-01-05 MVO SQZ y 8.92 9.28 97 9.48 6.28% 6.5%
2022-01-05 EPC SQZ y 46.09 47.69 87 48.86 6.01% 6.95%
2022-01-03 TRST SQZ y 33.32 33.95 99 35.29 5.91% 6.09%
2022-01-03 WTTR SQZ y 6.24 6.7 86 6.6 5.77% 12.18%
2022-01-03 QCRH SQZ y 56.01 56.23 84 59.2 5.7% 5.71%
2022-01-05 TX SQZ y 45.72 48.03 86 48.28 5.6% 7.09%
2022-01-04 LPI SQZ y 68.05 75.98 97 71.45 5% 14.94%
*RS Rank on day before breakout.
CwH Stocks Likely to Close above BoP at Next Session*
Symbol Company Industry RS Rank Last Close BoP % off BoP
PNRG PrimeEnergy Resources Corporation Oil & Gas E&P 96 74.51 75.04 99.29
TECK Teck Resources Ltd Ordina Other Industrial Metals & Mining 93 30.41 30.44 99.9
EQT EQT Corporation Oil & Gas E&P 88 22.81 23.37 97.6
HWBK Hawthorn Bancshares, Inc. Banks - Regional 85 25.9 26.12 99.16
SMM Salient Midstream Asset Management 85 6.93 6.96 99.57
PRPH ProPhase Labs, Inc. Drug Manufacturers - Specialty & Generic 85 7.56 8.07 93.68
PARR Par Pacific Holdings, Inc. Oil & Gas Refining & Marketing 85 17.68 17.81 99.27
*These stocks were selected using our CWH price breakout model. This model selects stocks likely to close above the breakout price at the next session. When backtested over the three years beginning January 2019 until October 28, 2021, 80% of the stocks selected closed above their breakout price. This does not mean that on any day, 80% of the stocks selected will breakout, but it is the expectation over an extended period of time.
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Top Rated Cup and Handle Stocks as of Friday January 07, 2022
Symbol BO
Company Industry RS
KRP 15.80 552,286 Kimbell Royalty Partners Oil & Gas E&P 92 15.38
LPL 10.78 858,992 LG Display Co - Ltd AMERIC Consumer Electronics 87 10.16
WTTR 7.00 605,057 Select Energy Services - Inc. Oil & Gas Equipment & Services 87 6.60
CNR 19.08 863,020 Cornerstone Building Brands - Inc. Building Products & Equipment 86 16.58
PARR 17.81 530,238 Par Pacific Holdings - Inc. Oil & Gas Refining & Marketing 85 17.68
UE 19.83 1,030,646 Urban Edge Properties REIT - Diversified 81 19.52
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 36231.7
-0.29% -0.29% Down
NASDAQ 14935.9
-4.53% -4.53% Down
S&P 500 4677.03
-1.87% -1.87% Down
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
S&P 500
Dow Jones
Best Performing Industry
1 Week 3 Weeks 13 Weeks 26 Weeks
REIT - Residential
REIT - Residential
Industrial Distribution
Most Improved Industry (by change in technical rank2)
Aerospace & Defense
Aerospace & Defense
Aerospace & Defense
Aerospace & Defense
Charts of each industry rank and performance over 12 months are available on the site


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