Weekly Newsletter 07/01/11
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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  

The NASDAQ Composite has made a striking recovery over the last two weeks with the index gaining more in percentage terms than the other major indexes we follow. While we were expecting the consolidation to the downside to continue, the improved likelihood of Greece avoiding default (in the short term) has allowed the index to recover to above its 50 dma. The rise has been so rapid that the moving average based trend algorithm for this index remains at down while the others are showing a positive up trend.

Our equivolume chart shows the index has recorded three accumulation days this week although the volume each day has disappointed at only about 90% of the 50 day average. That may be due to the approaching long weekend and summer vacations, but we would still like to see higher volume if the rally is to be sustained.

NASDAQ Equivolume Chart

The daily chart shows the index has risen well above its 2-standard deviation Bollinger Band which is likely unsustainable for more than a few days. While it is common to see an index track the 2-sd BB for several days as it moves higher (see A and B below) or lower (C), it is unusual for it to stay outside the 2-sd band for long (D). The index now faces resistance at 2835 but could reverse to test support at  2740.

NASDAQ Composite

We wish all our readers a happy and safe Independence Day weekend.
 New Features this Week Additional Value that we added this week

At the request of a subscriber we have added an ability to download our complete industry structure. This is reached from the Evaluate > Industry Analysis > Industry Browser menu choice. Click the download button and you will get a file in .csv (comma separated values) format suitable for importing into any spreadsheet application.

The download also include for each stock, rank in industry, RS Rank, and our CET, CEF and CE rating.
This Week's Top Tip Tips for getting the most out of our site

This feature will return next week.
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 12582.8 5.43% 8.68% Up
NASDAQ 2816.03 6.15% 6.15% Down
S&P 500 1339.67 5.61% 6.52% Up
Russell 2000 840.04 5.3% 7.2% Up
Wilshire 5000 14172.2 5.57% 6.64% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
6.15 %		 Dow Jones
1.67 %		 Dow Jones
8.68 %		 Dow Jones
8.68 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Cigarettes Cigarettes Cigarettes Health Care Plans
 Most Improved Industry (by change in technical rank2)
Auto Parts Stores
+ 77		 Data Storage Devices
+ 74		 Music & Video Stores
+ 132		 Aerospace/Defense - Major Diversified
+ 175
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 14 11.69 4.45% 3.56%
Last Week 21 11.38 5.93% 4.17%
13 Weeks 179 12.69 10.78%
 3.33%
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 OCZ OCZ Technology Group Inc. 104
Top Technical HCCI Heritage-Crystal Clean, Inc. 62
Top Fundamental ACOM Ancestry.com Inc 45
Top Tech. & Fund. GHDX Genomic Health, Inc. 38
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 CLFD Clearfield, Inc. 113
Top Technical CLFD Clearfield, Inc. 113
Top Fundamental PCP Precision Castparts Corp. 20
Top Tech. & Fund. PCP Precision Castparts Corp. 20
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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