| Market Summary | Weekly Breakout Report | Top Breakout Choices | Top 2nd Chances | New Features | Tip of the Week |
The week began badly with news from the Federal Reserve that the recession in manufacturing in the New York region was worsening instead of easing as anticipated. A downgrade of credit ratings on 18 banks by Standard and Poors also moved markets lower. The economic news improved somewhat by week's end as the IMF signaled it would revise its growth forecasts for the year modestly upwards. The week ended with a rally in technology stocks led by Apple Computer and Microsoft but it was insufficient to forestall a drop in the NASDAQ Composite and the other major indices for the week overall.
The fall in the NASDAQ early in the week led us to believe that a test of resistance at the 1660 level was likely. While that cannot be ruled out, we think it is less likely. However, an indication that the mood of the market is turning more cautionary is the complete lack of successful breakouts this week. In part, this is due to a decline in daily volume levels, but we have also seen attempts fail on price indicating that traders are in control and taking quick profits while they can.
We've added a facility to the Zacks Strong Buy login page that allows you to set a stop-loss percentage. This is used in the ZSB history report to provide a more realistic report of the performance you would have achieved by following our ZSB strategy.
The default stop-loss percentage value is 5%, but you can set this to any value between 0 and 20%. The value is used to determine the first day that the intraday low falls below the stop loss percentage you specify. The report then assumes a sell at the stop loss price on that date.
The format of the report has been modified to show when a stop loss has been applied. The report also shows any sell alert dates, the sell at open after alert price and the latest closing price if the position was not stopped out or a sell alert was not issued.
The Zacks Strong Buy Strategy has been shown to provide exceptional returns (over 100% compound per year). However, it is important to follow the strategy exactly to achieve the results expected. The strategy rules are:
Buy Rules:
- For subscribers able to act on email alerts: buy as soon as you receive the alert
- For others: buy at next session's open. (Note: After an alert, these stocks move up quickly and buying at the open can mean paying a significant premium over the alert price with a consequent loss of profits. The premium paid is shown in the simulation results).
Sell Rules
- Immediately after opening a position initiate a stop loss order at 4-5% below the alert price.
- If you bought in response to an attempted breakout alert but the breakout was not confirmed, sell at the next open - we send you an email sell alert if the breakout is not confirmed.
- Sell at next open if it is no longer ranked #1 on Zacks rank. We send you a sell alert when this condition is met.
If you haven't yet done so, read our white paper and try our backtest tool to prove the validity of the strategy.
You must be a Zacks subscriber to access the Zacks Strong Buy watchlist and associated reports and alerts.. You can get a 30-day free trial from Zacks Investment Research by clicking the Zacks logo:
| Index | Value | Change Week | Change YTD | Trend | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dow | 8539.73 | -2.95% | -2.7% | Down | ||||||||||||||||||||||||||||||||||||
| NASDAQ | 1827.47 | -1.69% | 15.88% | Up | ||||||||||||||||||||||||||||||||||||
| S&P 500 | 921.23 | -2.64% | 1.99% | Down | ||||||||||||||||||||||||||||||||||||
| Russell 2000 | 512.72 | -2.68% | 2.66% | Up | ||||||||||||||||||||||||||||||||||||
| Wilshire 5000 | 9428.51 | -2.81% | 3.76% | Down | ||||||||||||||||||||||||||||||||||||
1The Market Signal is derived from our proprietary
market model. The market model is described on the site. 2The site also shows industry rankings based on fundamentals, combined technical and fundamentals, and on price alone. The site also shows daily industry movements. |
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# of Breakouts |
Period Average1 |
Max. Gain During Period2 |
Gain at Period Close3 |
|
|---|---|---|---|---|
| This Week | 0 | 16.31 | 0% | 0% |
| Last Week | 12 | 16.62 | 6.43% | -3.09% |
| 13 Weeks | 208 | 16.69 | 22.77% |
5.63% |
2This represents the return if each stock were bought at its breakout price and sold at its intraday high.
3This represents the return if each stock were bought at its breakout price and sold at the most recent close.
Category |
Symbol |
Company Name |
Expected Gain1 |
|---|---|---|---|
| Best Overall | DL | China Distance Education Holdings Limited | 123 |
| Top Technical | EC | Engelhard Corp | 49 |
| Top Fundamental | ABV | Ambev (comp De Bebidas Adr) | 56 |
| Top Tech. & Fund. | ABV | Ambev (comp De Bebidas Adr) | 56 |
Category |
Symbol |
Company Name |
Expected Gain1 |
|---|---|---|---|
| No breakouts this week, so no second chances. | |||
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