Weekly Newsletter 06/02/13
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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  

Our trend indicators for the major indexes remained at 'down' for the week. This comes as no surprise to my readers as we have been anticipating a consolidation for the last three weeks in this newsletter. Looking forward, a test of support at 3422 seems likely. If that level holds then a continued period of consolidation between 3420 and 3500 can be expected until the rally resumes.

You will note that I've added a 'slope' chart to the usual chart this week. This is a new feature so be sure to read about it below.

NASDAQ Composite
 New Features this Week Additional Value that we added this week

'Slope' Technical Indicator

The new 'Slope' indicator is accessed from our Technical Analysis chart window.slope menu When you select 'Slope' from any of the four technical indicators drop down choices a 'Slope period' input field will appear.

'Slope' is the gradient of a linear regression line through the closing price of the stock for the selected period before the date the slope is plotted. So in the NASDAQ Comp. chart above the final value of the slope (-0.17) is the slope of a regression line for 10 sessions before May 31.

Slope values are normalized to be between -1 and plus 1. More on their Interpretation below.
This Week's Top Tip Tips for getting the most out of our site

How to interpret Slope

The slope chart can be used to determine short, medium and long term trends. You can experiment with different values for period but 10, 50 and 200 would be reasonable starting values.

The value of the slope chart is that it shows you when an uptrend is weakening as the slope gets less positive and the down trend may soon be turning upwards.

This chart of AAPL shows that the medium (50 day) term trend was down, even when there were attempts to rally.

AAPL trend

Enjoy your new toy!
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 15115.6 -1.23% 15.35% Down
NASDAQ 3455.91 -0.09% 14.45% Down
S&P 500 1630.74 -1.14% 14.34% Down
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
-0.09 %		 NASDAQ Composite
7.28 %		 Dow Jones
16.05 %		 Dow Jones
15.35 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Toy & Hobby Stores Toy & Hobby Stores Toy & Hobby Stores Cement
 Most Improved Industry (by change in technical rank2)
Home Furnishings & Fixtures
+ 51		 Semiconductor - Memory Chips
+ 64		 Healthcare Information Services
+ 126		 Toy & Hobby Stores
+ 212
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 12 12.08 2.45% 1.04%
Last Week 8 11.92 6.24% 2.14%
13 Weeks 189 12.85 11.08%
 2.64%
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 HOV Hovnanian Enterprises, Inc. 102
Top Technical HOV Hovnanian Enterprises, Inc. 102
Top Fundamental RPXC RPX Corp 44
Top Tech. & Fund. RPXC RPX Corp 44
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 HOV Hovnanian Enterprises, Inc. 103
Top Technical CSII Cardiovascular Systems Inc 53
Top Fundamental EGHT 8x8, Inc. 92
Top Tech. & Fund. EGHT 8x8, Inc. 92
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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