BreakoutWatch.com Weekly Review for 05/09/2015

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

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 market trended down for the first three days causing our trend signals to turn down for all three major indexes on Thursday. Friday brought a sharp turn around as the UK election results brought a surprise victory for the Conservatives and Friday's employment report showed employers added 223,000 new jobs in April beating the consensus estimate of 218,000. Wage growth was minimal, however, which is expected to provide further reason for the Fed to hold off on an interest rate rise. The one day rally was insufficient to reverse our trend signals which remain down.

Weekly Breakout Report

The breakout of the week was Good Times Restaurants from a cup and handle pattern base. We issued an alert at 1:29 pm on Monday for GTIM when priced at 8.35 which could have been purchased before closing for the day at 8.44. The stock gapped-up on Tuesday and closed at 9.35 on Friday for a gain of 12% over our alert price. This breakout could have been seen as a near certainty as we explain below.

Brkout Date	Symbol	Base	Squeeze	BrkoutOut Price	Brkout Day Close	RS Rank^*	Last Close	Current % off BOP	Gain at Intraday High
Breakouts for Week Beginning 05/04/15
05/04/15	GTIM	CwH	N	8.30	8.44	97	9.35	12.65	18.67
05/08/15	SSNI	SQZ	Y	10.66	11.95	83	11.95	12.10	12.1
05/08/15	IMPV	CwH	N	49.39	53.98	95	53.98	9.29	9.29
05/04/15	BSFT	HTF	N	35.85	37.63	91	34.63	-3.40	7.25
05/08/15	DATA	CwH	N	103.40	110.69	91	110.69	7.05	7.05
05/06/15	POWR	SQZ	Y	14.04	14.19	94	14.16	0.85	5.56
05/04/15	ATHM	CwH	N	53.31	55.02	94	50.09	-6.04	5.51
05/04/15	AMCX	HTF	N	77.27	80.02	86	76.25	-1.32	5.01
05/08/15	NRG	HSB	N	25.20	26.40	16	26.4	4.76	4.76
05/06/15	NRG	HSB	N	25.24	24.59	13	26.4	4.60	4.6
05/04/15	MATR	CwH	N	7.17	7.20	0	6.95	-3.07	4.46
05/07/15	PLCE	SQZ	Y	66.08	68.61	90	69.01	4.43	4.43
05/04/15	RGR	CwH	N	56.37	58.56	85	55.77	-1.06	4.26
05/07/15	ATSG	SQZ	Y	10.01	10.12	79	10.29	2.80	2.8
05/07/15	ICE	SQZ	Y	232.24	233.26	75	238.24	2.58	2.58
05/08/15	SPCB	CwH	N	12.74	13.03	94	13.03	2.28	2.28
05/04/15	OZM	SQZ	Y	13.21	13.3	76	12.7	-3.86	2.12
05/04/15	NDSN	SQZ	Y	80.78	81.63	71	81.69	1.13	1.67
05/08/15	ICE	SQZ	Y	234.76	238.24	74	238.24	1.48	1.48
05/07/15	WEN	SQZ	Y	11.06	11.19	87	11.08	0.18	1.36
05/08/15	LENS	SQZ	Y	8.82	8.84	90	8.84	0.23	0.23
05/06/15	TAXI	HSB	Y	10.73	10.62	32	10.61	-1.12	0.19
05/08/15	ESNT	CwH	N	26.00	26.00	81	26	0.00	0
Weekly Average (23 breakouts)								2.02	4.68
^*RS Rank on day before breakout.

New Features this Week

Additional Value that we added this week

No new features this week.

This Week's Top Tip

Tips for getting the most out of our site

Lessons from a High Volume Handle in a Cup and Handle Pattern

The breakout of GTIM was occasioned by the announcement on May 4 of a stock offering for the purpose of buying Bad Daddy's Burger Bar. In hindsight, we can see that Trading in GTIM on the day before breakout was a near certain indicator that insiders were buying in anticipation of the announcement. After a two day sell-off (probably by insiders to force the price down), the price surged up on Friday May 1 on 2 1/2 times average volume. This kind of action in the handle with a sell-off followed by a rise on higher volume, is text book behavior, but rarely do we see the indications that a breakout is coming as clearly as it was signaled here. At the next session (May 4) volume surged again to 10 times ADV and as we mentioned above, the stock could have been bought on the alert before the end of day at up to 8.44.

We mention the importance positive price and volume performance in the handle in our Cap and Handle Methodology page and highlighted it as long ago as 2005.

"After the price has stabilized (in the handle) it is not uncommon to see the price begin to rise on higher volume. This is an indication that institutions are starting to nibble and may indicate a strong breakout to come. We have noticed that breakouts are 17% stronger, on average, when the price and volume rise on the day before the breakout. See our newsletter of 4/23/05."

Market Summary

Overview of market direction and industry rotation

Index

Value

Change Week

Change YTD

Trend

Dow

18191.1

0.93%

2.06%

Down

NASDAQ

5003.55

-0.04%

5.65%

Down

S&P 500

2116.1

0.37%

2.78%

Down

1 Week	13 Weeks	26 Weeks	Year-to-Date
Best Performing Index
Dow Jones 0.93 %	NASDAQ Composite 5.46 %	NASDAQ Composite 8.01 %	NASDAQ Composite 5.65 %
Best Performing Industry (by average technical score over each period)
1 Week	3 Weeks	13 Weeks	26 Weeks
Drugs Wholesale	Sporting Goods	Toy & Hobby Stores	Toy & Hobby Stores
Most Improved Industry (by change in technical rank²)
Networking & Communication Devices + 57	Basic Materials Wholesale + 87	Office Supplies + 196	Music & Video Stores + 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.

Top Breakout Choices

Stocks on our Cup-and-Handle list with best expected gain if they breakout