BreakoutWatch.com Weekly Review for 07/15/2013

Weekly Newsletter 07/14/13

You are receiving this email because you are or were a BreakoutWatch.com subscriber, or have subscribed to our weekly newsletter. This newsletter summarizes the breakout events of the week and provides additional guidance that does not fit into our daily format. It is published each weekend.

Market Summary

Weekly Breakout Report

Prior editions of this newsletter with our valuable Tips of the Week are available here.

Weekly Commentary

The NASDAQ Composite gapped up on Thursday, easily breaking through the resistance level of 3532 set back on May 22. The rally continued on Friday with the index easily outperforming the DJI and S&P 500 indexes. You will see from the chart that volume remains stubbornly low, with the volume on Thursday barely reaching the 50 day average despite the strong move upward. As a result our trend indicator for the NASDAQ remained on down as the move up wasn't confirmed by strong volume. Nevertheless, as we showed last week, our separate trend reversal signal charts show the rally is continuing so we have taken the unusual step of overriding the trend indicator and set it to 'up' as of last Thursday. I believe this decision will be confirmed this week as earnings season continues and corporations predominately beat earnings expectations. The news late Sunday that China's economy is slowing less than feared and the consequent bounce in Asian markets will surely carry through to the US markets on Monday.

NASDAQ Composite

The low volume kept the number of confirmed breakouts down to 9 for the week. Russian internet company YANDEX (YNDX) was the top performer after breaking out from an almost textbook shallow cup-with-handle pattern on Tuesday and gaining 9.6% by Friday's close. To see why it is almost textbook, look at out tip of the week.

New Features this Week Additional Value that we added this week

Our entry-level site, essential.breakoutwatch.com received a boost this week with the correction of a bug and the addition of two new features that deliver extra value for the bargain price of just $19.95 a month.

A bug which prevented the Alert Monitor form showing was corrected. That version of the alert monitor is driven by a Google Docs spreadsheet. Although not as fully featured as the alert Monitor on the main site, it does offer real-time indications of when our watchlist stocks have reached their breakout price.
Our EPS trends tool is now available through essential.breakoutwatch.com.
Our Trend Reversal Signals are also available through essential.breakoutwatch.com

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



                Recognizing
                    a textbook cup-with-handle

                    

                  Back in 2005 we
                  wrote an article describing why a cup with handle forms forms
                  and the desirable features of the pattern. See Anatomy
                    of a Anatomy of a Cup-with-Handle Chart Pattern

Although 
                  the pattern occurs quite frequently, it is often difficult to
                  identify with just the naked eye, which is why our recognition
                  algorithm is so valuable.


                  The chart of YANDEX (YNDX), which broke out this week, is a
                  good example of a near perfect CwH chart.

                  

                  

                  

                  In particular, note that the handle volume is exactly what we
                  should look for with a sharp decline after forming the pivot,
                  and then increasing volume before breakout.

                  

                  You might also notice that there is in fact a first attempt at
                  a CwH pattern with the pivot at 27.64 on June 18. However, the
                  handle that then formed did not have a well defined volume
                  pattern and the breakout which formed the final pivot at 28.06
                  was initially weak before the better handle formed leading to
                  a strong breakout.

Market Summary Overview of market direction and industry rotation

Index

Value

Change Week

Change YTD

Trend

Dow

15464.3

2.17%

18.01%

NASDAQ

3600.08

3.47%

19.23%

S&P 500

1680.19

2.96%

17.81%

1 Week	13 Weeks	26 Weeks	Year-to-Date
Best Performing Index
NASDAQ Composite 3.47 %	NASDAQ Composite 9.26 %	NASDAQ Composite 15.18 %	NASDAQ Composite 19.23 %
Best Performing Industry (by average technical score over each period)
1 Week	3 Weeks	13 Weeks	26 Weeks
Music & Video Stores	Music & Video Stores	Music & Video Stores	Music & Video Stores
Most Improved Industry (by change in technical rank²)
Recreational Vehicles + 77	Home Improvement Stores + 158	Semiconductor - Memory Chips + 158	Toy & Hobby Stores + 211
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	9	10.69	5.66%	2.74%
Last Week	2	10.54	10.49%	5.57%
13 Weeks	139	11.23	16.34%	9.8%

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