Breakoutwatch Weekly Summary 01/22/22

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Weekly Commentary
NASDAQ Loses 7.6% on Earnings and Inflation Fears

The NASDAQ Composite is now well into a correction being 15% off its Nov. 22 high. The Q4 earnings reports got off to a bad start with Netflix losing 20% after reporting slower subscriber growth in the fourth quarter, This followed Peloton losing 20% the day before so fear that growth stocks are in jeopardy has spread. A sign that growth stock investors are jittery is that each buy-the-dip move is followed by selling to capture what little upside profit is available.

Inflation at 7% may recede as supply chain issues are resolved but Goldman Sachs CEO said that this could be replaced by wage inflation as companies are being forced to pay higher wages to attract workers. Unless companies are able to raise prices, this will result in lower profit margins and lower stock prices.
Needless to say, profitable breakouts are hard to come by in a falling market and just one breakout gained more than 5% this week. Danaos Corporation (DAC) gained 13.5% after breakout from a 3 month long Volatility Squeeze.
Chart of the Week
Adams Resources & Energy, Inc. [AE] is ranked 14th in the Oil and Gas Integrated group. On Friday it climbed the right side of a CWH handle on 3 times average volume. If AE should breakout there is a potential upside value of 10% to the November 4 high of $34.
AE 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 01/17/22
List Breakouts Avg. Gain
CWH 4 -1.87
SQZ 7 -1.93
Breakouts Gaining at Least 5% for Week Beginning 01/17/22
Brkout Date Symbol Base Squeeze Brkout Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
2022-01-18 DAC SQZ y 74.06 79.87 95 78.12 5.48% 13.48%
*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
AE Adams Resources & Energy, Inc. Oil & Gas Integrated 88 30.9 31.04 99.55
SOHON Sotherly Hotels Inc. REIT - Hotel & Motel 89 17.73 18.25 97.15
FXNC First National Corporation Banks - Regional 89 22.99 23.85 96.39
HWBK Hawthorn Bancshares, Inc. Banks - Regional 91 25.785 26.12 98.72
*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.

Top Rated Cup and Handle Stocks as of Friday January 21, 2022
Symbol BO
Company Industry RS
TSRI 14.47 1,300,055 TSR - Inc. Software - Application 95 11.20
KRP 16.10 535,976 Kimbell Royalty Partners Oil & Gas E&P 94 14.40
ETRN 11.22 4,775,897 Equitrans Midstream Corporation Oil & Gas Midstream 92 10.34
FULT 19.17 1,421,338 Fulton Financial Corporation Banks - Regional 88 17.82
WSR 10.50 643,339 Whitestone REIT REIT - Retail 88 10.31
PUMP 10.80 1,198,998 ProPetro Holding Corp. Oil & Gas Equipment & Services 87 9.99
TRQ 17.46 1,296,680 Turquoise Hill Resources Copper 87 15.45
BSM 12.02 557,595 Black Stone Minerals - L.P. Oil & Gas E&P 81 10.97
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 34265.4
-4.58% -5.7% Down
NASDAQ 13768.9
-7.55% -11.99% Down
S&P 500 4397.94
-5.68% -7.73% 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
Oil & Gas Integrated
REIT - Residential
Thermal Coal
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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