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We've slashed our rates by 30-50% until December 31, 2007 for subscriptions of 3-months or more.
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NEW WATCHLIST COMING JANUARY 2: HIGH TIGHT FLAG
(see this week's Top Tip for 2007 performance analysis)

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Market Summary

The weekly market summary will return next week.

High Tight Flag Watchlist

Commencing Wednesday January 2nd, 2008 we will begin publishing a High Tight Flag (HTF) watchlist. This promises to be a very profitable source of trades if stocks on the list are bought on breakout. We will begin sending breakout alerts for these stocks beginning Monday, January 7th.

The watchlist is quite simple with links to a chart, the industry group to which the stock belongs and our CE evaluation for the stock. Here's a sample from December 26, 2007.

High Tight Flag Performance during 2007

Last week we introduced the criteria for our new watchlist based on the High Tight Flag pattern. This week we have looked at the performance of the pattern during 2007 and present the results below. You should note that the performance is potentially understated because stocks that broke out later in the year have possibly not yet had time to reach their full potential.

Algorithm Criteria

Our algorithm looks for stocks that meet the following criteria:

• they must have formed a handle within the last 3 weeks of trading
• the handle must be at least 5 days long (we may reduce this on further research)
• the decline in the handle must be no more than 20%
• there must have been a gain of at least 100% in the eight weeks prior to the handle formation
• there is no minimum price or volume requirement (we may add a minimum volume in the future)

Some definitions of the high, tight flag (HTF) require that the stock be moving sideways before the rise and that volume be declining in the handle (like the CwH). We have not incorporated those criteria in the algorithm.

Performance Results for 2007

The results were obtained using the following methodology

1. All stocks that would have qualified as an HTF using our criteria were identified for each trading session in 2007
2. Breakouts were identified as those stocks that rose above the pivot price + $0.10
3. Their subsequent gain to their maximum intraday high following breakout measured from the breakout price.
4. The maximum drawdown from the breakout date to the maximum intraday was also measured. If the price never dropped below the breakout price before the maximum high was reached then the draw down was zero.
5. Because our usual minimum price for our watchlists is $6, we analyzed the results for stocks below and above that price limit.

Investment Advisors Using our Service

TradeRight Securities, located in a suburb of Chicago, is a full services investment management company and broker/dealer. They have been a subscriber, and user, of BreakoutWatch.com for some time now. They practice CANTATA and use Breakoutwatch.com as a “research analyst”. You can learn more about TradeRight Securities at: www.traderightsecurities.com. If you’re interested in speaking to a representative, simply call them toll-free at 1-800-308-3938 or e-mail gdragel@traderightsecurities.com.

Note to advisors: If you would like to be listed here, please contact us. As a service to those who subscribe to us, there is no additional charge to be listed here.