The NASDAQ Composite set a new intraday high for the year on Friday but ended the session just below its highest closing value for the year. The impetus for the new high came from the unemployment data for November which showed that payrolls fell by 11,000 in November 2009, the lowest monthly job losses since the recession began and the overall unemployment rate came down from 10.2 to 10%.

While unemployment is still high, the report showed that temporary employment rose by 52,000. This shows that employers are beginning to cautiously add workers and is a leading indicator for an eventual improvement in full-time employment.

For the week, the NASDAQ Composite gained 2.6% and the Russell 2000 rose 4.4%. There was also a welcome increase in volume as weekly volume rose to its best level in five weeks.

The higher volume levels allowed the number of successful breakouts to jump by 50% this week. These gained an average of 5.5% by Friday's close, comfortably outperforming the major indexes.

Star performer for the week was CAAS (China Automotive Systems) which broke out from a high tight flag pattern on Monday and gained 27.6% to its intraday high.

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Breakout Choices for Busy Investors

Our Tradewatch service is designed for investors who are unable to monitor the markets in real time.

The service selects stocks that our research has shown are likely to perform best after breakout and suggests a price at which you should place a buy order.

Our 'buy on breakout' list has done particularly well this year. The service selects stocks for purchase at the next session if a specified price is reached. This allows you to place a "buy stop" order with your broker which will only be filled if the specified price is reached. This price is usually above the breakout price and our research has shown that stocks that reach the buy stop price after breakout usually have enough momentum to go on to make significant gains.

During 2009, forty-six stocks would have been bought in this way. If you then placed a stop loss order at 8% below your buy price, you would only have been stopped out on seven occasions. If you then held the stock until it reached its subsequent high, you would have made an average gain of 51.5%, including the 8% stop losses. The following table shows the Buy On Breakout stocks for the year so far in descending order of gain.