Our trend signal for the NASDAQ Composite went briefly negative on Wednesday but Friday's gap up and higher close turned the indicator positive again. However, as the chart shows, the index is above its upper trend line so a consolidation in the next few days appears likely.



The number of confirmed breakouts jumped to 19 this week, well above the 13 week average. Renewable Energy Group Inc (REGI) was the stand out performer with a gain of 18.4% after breaking out from a cup-with-handle base on Thursday.

Note that our requirement for a confirmed breakout is that the stock must close above its breakout price on daily volume at least 1.5 times the 50 day average volume. A study performed this week using the CwH Backtest tool brings into question the volume requirement and we may adjust it in the near future. See below.

We introduced a new home page this week. http://www.breakoutwatch.com/home. If you have your username and password "remembered" by the site then you will not normally see it.

We have also dropped the the $9.95 signup fee for a trial in favor of a 30 day totally free trial of all the sites features.

New Strategy Suggestions

As regular readers know, we frequently run our CwH backtest tool over multiple simulations to determine which set of filters provide the best returns in current market conditions. We did so again this week and were surprised to find that requiring breakout day volume of at least 1.5 times ADV reduced returns and it was better to require only that volume reach the average daily volume level.

In addition we found that the previous suggestion that industry rank be in the top 40% was still valid but that a stop loss on breakout price of 5% and a subsequent trailing stop of 3% produced the best returns.

I have described the new suggested strategy in an email that goes to new subscribers. Newsletter readers can access the email contents at Breakoutwatch.com Suggested Strategy.