Weekly Newsletter 04/09/10
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Market Summary Weekly Breakout Report Top Breakout Choices Top 2nd Chances New Features Tip of the Week
Prior editions of this newsletter with our valuable Tips of the Week are available here.
 Weekly Commentary  

As we anticipated last week, the NASDAQ Composite broke out from a short flat base pattern and moved up moderately with a 2.14% gain to post a new post-recession high. The 1 year chart shows that the resistance line has flattened slightly since last September and that the index is now about to meet that resistance line again. This would suggest that another period of consolidation or retrenchment is due.

1 year NASDAQ
This is also confirmed by the 6-month chart with Bollinger Bands where we see that the index has ridden up the outer band for a few days. Riding the upper (or lower) band is not unusual, but when combined with meeting the resistance trend, then a pull back is more likely.

6 month NASDAQ

The number of breakouts jumped to 21 this week from just 7 last week. Star performers were Harley-Davidson (HOG), which broke out from a cup-with-handle base on Monday and closed 13.6% above its breakout price, and MGM Mirage (MGM) which closed 15.6% higher.
 New Features this Week Additional Value that we added this week

 

Over the weekend we will be installing the new menu system we announced last week. This required a major rewrite of many of the linkages within the site and although it may not look at all different, it should function more effectively, especially for Internet Explorer users.

If you find any problems with the new menu please tell us!

 
This Week's Top Tip Tips for getting the most out of our site

One of our subscribers has done extensive work with the the cup-with-handle backtest tool and found a combination that gives exceptional returns. His method was to use a very short hold time (5 days) which delivered small gains per trade but when compounded gave massive gains overall.

These were his parameters:

test parameters

And these were the results:

results
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 10997.3 0.64% 5.46% Up
NASDAQ 2454.05 2.14% 8.15% Up
S&P 500 1194.37 1.38% 7.11% Up
Russell 2000 702.95 2.77% 10.86% Up
Wilshire 5000 12447.9 1.61% 8.27% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
1.01 %		 Russell 2000
5.91 %		 NASDAQ Composite
14.71 %		 Russell 2000
10.86 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Home Furnishing Stores Home Furnishing Stores Housewares & Accessories Housewares & Accessories
 Most Improved Industry (by change in technical rank2)
Aluminum
+ 54		 Aluminum
+ 99		 Long Distance Carriers
+ 213		 Long Distance Carriers
+ 210
Charts of each industry rank and performance over 12 months are available on the site

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.
 Weekly Breakout Report How confirmed breakouts performed this week
# of Breakouts
Period Average1
Max. Gain During Period2
Gain at Period Close3
This Week 21 16.54 6.2% 3.57%
Last Week 7 17.85 12.42% 8.98%
13 Weeks 233 19.23 14.89%
 9.29%
1The average number of breakouts in each week over the previous 13 weeks.
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.
 Top Breakout Choices Stocks on our Cup-and-Handle list with best expected gain if they breakout
Category
Symbol
Company Name
Expected Gain1
Best Overall CPD Caraco Pharmaceutical Laboratories Ltd. 105
Top Technical CVGI Commercial Vehicle Group Inc. 89
Top Fundamental CAAS China Automotive Systems Inc. 76
Top Tech. & Fund. CAAS China Automotive Systems Inc. 76
1This is the gain predicted by our Expected Gain model if the stock breaks out. Expected Gains for all cup-and-handle stocks are published on our site.
 Top Second Chances Stocks that broke out this week and are still in buyable range
Category
Symbol
Company Name
Expected Gain1
Best Overall YSI U-Store-It Trust 95
Top Technical CITP COMSYS IT Partners, Inc. 42
Top Fundamental TREX Trex Co. Inc. 56
Top Tech. & Fund. TREX Trex Co. Inc. 56
1This is the gain predicted by our Expected Gain model after the stock has broken out which uses the volume on breakout as a predictive term. Because the model variance is +/- 38% the expectation can be negative.
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