Weekly Newsletter 10/09/15
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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  

This was a strong week with the NASDAQ Composite gaining 2.6% (Friday to Friday close) although the large cap indexes did even better. The result is that all our trend indicators are now positive. The week also produced the largest number of weekly breakouts (104) since I've been tracking that number (more below).

The NASDAQ itself is showing a double bottom formation with a pivot (and resistance) at 4961. This results in a high number of Double Bottom (70) stocks on the DB watchlist and an even higher number (111) of cup and handle stocks on the CWH list due to the similarity in the pattern shapes. The NASDAQ also faces a psychological hurdle at the 50 day  moving average level,just 5 points above Friday's close.

NASDAQ Chart
 Weekly Breakout Report  

The number of  successful breakouts this week rocketed up to 104 from 41 last week. There were 65 Volatility Squeeze breakouts, 15 cup and handle, 6 head and shoulders bottom, 3 Double Bottom and 1 High Tight Flag, which also recorded the highest gain for the week.

Breakouts for Week Beginning 10/05/15
Brkout Date Symbol Base Squeeze BrkoutOut Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
10/08/15 APPEND HTF N 6.27 7.00 99 8.37 33.49 33.97
10/07/15 CORE CwH N 67.21 73.30 86 77.63 15.50 15.58
10/05/15 MEGS CwH N 22.63 23.00 87 25.9 14.45 15.2
10/05/15 MU HSB N 16.36 17.57 11 18.185 11.16 14.43
10/06/15 FONT CwH N 13.81 14.49 91 15.65 13.32 13.32
10/05/15 EVE CwH N 29.57 31.75 98 33.3 12.61 12.61
10/07/15 GEN CwH N 118.45 128.20 95 133.16 12.42 12.43
10/05/15 SPEC SQZ Y 70.33 74.39 91 77.24 9.83 9.83
10/05/15 RD HSB N 18.38 18.76 31 20.04 9.03 9.41
10/05/15 COM SQZ Y 71.25 74.93 92 77.58 8.88 8.88
10/07/15 MARX CwH Y 24.00 24.25 94 25.93 8.04 8.29
10/05/15 YACC SQZ Y 210.00 215.58 93 220.83 5.16 7.97
10/07/15 LYNX HSB N 16.87 17.64 44 18.14 7.53 7.77
10/06/15 SEW HSB N 26.48 26.78 28 28.36 7.10 7.74
10/07/15 FIX HSB N 12.55 13.01 7 13.495 7.53 7.57
10/05/15 MP SQZ Y 51.42 53.24 80 54.98 6.92 7.55
10/05/15 FOCI SQZ Y 83.91 85.82 86 90.18 7.47 7.5
10/05/15 FLT CwH N 52.29 54.14 96 55.89 6.88 6.88
10/05/15 SPAM CwH N 75.83 78.45 96 81 6.82 6.87
10/06/15 NIX SQZ Y 36.39 36.89 88 38.83 6.71 6.73
10/05/15 NETS SQZ Y 122.63 129.17 88 129.1 5.28 6.59
10/06/15 FANG SQZ Y 72.26 72.58 80 76.89 6.41 6.52
10/06/15 TANK SQZ Y 26.48 26.78 90 27.63 4.34 6.42
10/05/15 EX SQZ Y 99.29 100.95 90 105.57 6.32 6.32
10/06/15 VAST SQZ Y 66.66 68.63 82 70.15 5.24 6.18
10/06/15 MS CC SQZ Y 34.00 34.35 90 35.28 3.76 6.09
10/05/15 CB CwH Y 10.28 10.90 90 10.88 5.84 6.03
10/07/15 HAFT SQZ Y 24.72 25.24 89 25.92 4.85 5.5
10/07/15 MS SQZ Y 19.50 19.97 81 20.52 5.23 5.49
10/05/15 OF HSB N 21.17 21.73 29 22.22 4.96 5.34
10/07/15 TANK SQZ Y 26.81 27.43 93 27.63 3.06 5.11
10/07/15 COL SQZ Y 31.37 32.35 88 32.61 3.95 4.75
10/07/15 WK CwH Y 16.34 16.63 88 16.84 3.06 4.71
10/08/15 RHOS CwH N 7.92 8.20 89 8.28 4.55 4.67
10/09/15 HA SQZ Y 26.12 27.31 95 27.31 4.56 4.56
10/06/15 PUFFIN SQZ Y 49.74 49.9 93 51.31 3.16 4.52
10/06/15 HAWK SQZ Y 44.02 44.15 91 45.95 4.38 4.48
10/05/15 BPS CwH N 79.55 80.59 81 82.98 4.31 4.32
10/07/15 PUFFIN SQZ Y 49.85 50.94 91 51.31 2.93 4.29
10/05/15 MS FT SQZ Y 45.50 46.63 80 47.1549 3.64 4.29
10/07/15 ERNST SQZ Y 33.14 34.26 88 34.39 3.77 4.22
10/05/15 FEN CwH N 43.52 44.04 88 45.18 3.81 4.16
10/07/15 BK SQZ Y 35.80 36.57 88 36.6 2.23 4.16
10/07/15 AWL SQZ Y 31.70 32.56 86 32.69 3.12 3.94
10/05/15 SF CwH N 16.80 17.07 87 17.425 3.72 3.87
10/06/15 MP SQZ Y 53.27 54.18 85 54.98 3.21 3.81
10/07/15 NB SQZ Y 26.50 27.08 84 27.27 2.91 3.74
10/05/15 ST CwH N 40.97 41.51 88 42.43 3.56 3.73
10/07/15 HIGHS SQZ Y 34.44 35.08 88 35.71 3.69 3.72
10/07/15 PVT SQZ Y 38.27 38.97 86 39.32 2.74 3.71
10/07/15 ANTI SQZ Y 75.52 77.09 92 78.22 3.58 3.64
10/08/15 ALT SQZ Y 50.71 51.72 94 52.52 3.57 3.61
10/07/15 AGO SQZ Y 26.67 27.53 86 27.365 2.61 3.6
10/08/15 CRAY DB N 54.64 55.15 82 56.505 3.41 3.44
10/07/15 WEBS SQZ Y 36.58 37.35 83 37.6 2.79 3.28
10/05/15 HP CwH N 64.68 64.68 94 66.69 3.11 3.11
10/07/15 HP CwH N 64.68 65.68 94 66.69 3.11 3.11
10/07/15 WAD SQZ Y 23.12 23.56 82 23.7 2.51 3.07
10/09/15 LUV SQZ Y 38.76 39.915 82 39.915 2.98 3.04
10/06/15 MELD SQZ Y 14.18 14.37 87 14.605 3.00 3.03
10/07/15 CHIC SQZ Y 32.21 32.55 83 32.92 2.20 2.98
10/08/15 D DB N 57.21 58.19 83 58.91 2.97 2.97
10/07/15 FPS SQZ Y 19.73 20.08 86 20.08 1.77 2.89
10/07/15 FF SQZ Y 18.82 19.15 87 19.08 1.38 2.71
10/07/15 BARN CwH N 48.23 49.35 85 48.74 1.06 2.61
10/07/15 CATY SQZ Y 30.07 30.51 84 30.41 1.13 2.36
10/07/15 WEB SQZ Y 54.46 54.9 81 55.595 2.08 2.26
10/06/15 SF SQZ Y 17.08 17.33 87 17.425 2.02 2.17
10/08/15 OR SQZ Y 16.18 16.53 85 16.45 1.67 2.16
10/06/15 CANS SQZ Y 21.30 21.32 85 21.74 2.07 2.11
10/07/15 IND SQZ Y 45.36 46.11 84 45.79 0.95 2.05
10/07/15 CANS SQZ Y 21.32 21.4 90 21.74 1.97 2.02
10/08/15 LB SQZ Y 94.68 96.53 90 96.43 1.85 1.95
10/07/15 PREY SQZ Y 49.88 50.61 87 50.74 1.72 1.94
10/08/15 COL SQZ Y 32.28 32.86 90 32.61 1.02 1.8
10/08/15 VENT SQZ Y 18.61 18.66 82 18.94 1.77 1.77
10/08/15 TICS CwH N 19.05 19.20 83 19.38 1.73 1.76
10/08/15 SUBSIST SQZ Y 38.42 39.08 81 38.77 0.91 1.72
10/09/15 PAGE SQZ Y 25.74 26.07 92 26.07 1.28 1.55
10/09/15 ALT SQZ Y 51.75 52.52 94 52.52 1.49 1.53
10/08/15 JET CwH N 38.92 39.18 91 39.5 1.49 1.52
10/07/15 NYC SQZ Y 18.42 18.58 88 18.515 0.52 1.41
10/07/15 SN SQZ Y 29.81 30.03 85 29.9 0.30 1.21
10/08/15 FPS SQZ Y 20.07 20.3 87 20.08 0.05 1.15
10/08/15 WEBS SQZ Y 37.36 37.78 84 37.6 0.64 1.12
10/08/15 FIN SQZ Y 32.21 32.57 84 32.14 -0.22 1.12
10/09/15 ML CwH N 12.96 13.09 97 13.09 1.00 1.05
10/05/15 BF CwH N 15.19 15.23 81 15.32 0.86 0.99
10/06/15 SINS CwH N 14.09 14.20 97 14.11 0.14 0.99
10/09/15 DYKE SQZ Y 26.35 26.6 86 26.6 0.95 0.95
10/09/15 AH CwH N 19.25 19.42 86 19.42 0.88 0.88
10/07/15 CT DB Y 19.36 19.41 83 19.49 0.67 0.88
10/09/15 JET SQZ Y 39.21 39.5 90 39.5 0.74 0.77
10/08/15 OZARK SQZ Y 46.17 46.5 94 46.07 -0.22 0.71
10/09/15 CHM CwH N 30.45 30.63 92 30.63 0.59 0.62
10/09/15 PECS CwH N 10.24 10.28 94 10.28 0.39 0.49
10/06/15 SQ BK SQZ Y 26.26 26.32 87 27.63 N/A 0.23
10/08/15 CAKE SQZ Y 54.77 54.88 84 54.6 -0.31 0.2
10/08/15 RUSK CwH N 81.28 81.41 92 81.17 -0.14 0.16
10/06/15 SOC SQZ Y 13.42 13.44 98 13.27 -1.12 0.15
10/07/15 MUM CwH Y 14.12 14.13 82 14.05 -0.50 0.14
10/05/15 HEM SQZ Y 75.20 75.22 89 77.58 N/A 0.05
10/08/15 THOR CwH N 63.49 63.50 99 81.17 N/A 0.02
10/07/15 HEM SQZ Y 75.24 75.24 87 45.79 N/A -0
Weekly Average (104 breakouts) 3.88 4.41
*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

Prepare for the Many Breakout Alerts Expected Next Week

As of Friday, October 9, there were 207 breakout candidates on our watchlists, distributed as shown in the table below. With the markets now trending up we can expect prices to move higher resulting in a high number of alerts, especially from stocks in a Cup and Handle and Double Bottom pattern.

Chart Pattern List Symbol Potential Breakouts
as of 9/10/15
Cup and  Handle CWH 111
Double Bottom DB 70
Head and Shoulders Bottom HSB 11
High Tight Flag HTF 2
Volatility Squeeze SQZ 13
Total
207


To prevent being inundates with alerts, and to only receive high potential value alerts, I strongly recommend you set filters on at least the cup and handle and double bottom watchlists. Last week I suggested a strategy for trading cup and handle stocks for optimal return and I also suggest the same strategy for double bottom pattern breakouts because of the similarity of the two patterns. (A double bottom is essentially a cup with a low handle).

A set of filters that corresponds to the suggested strategy is:

Optimal Filters
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 17084.5 3.72% -4.14% Up
NASDAQ 4830.47 2.61% 1.99% Up
S&P 500 2014.89 3.26% -2.14% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones
3.72 %		 S&P 500
-3.35 %		 NASDAQ Composite
-3.31 %		 NASDAQ Composite
1.99 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Music & Video Stores Music & Video Stores Tobacco Products - Other Music & Video Stores
 Most Improved Industry (by change in technical rank2)
Publishing - Newspapers
+ 52		 Publishing - Newspapers
+ 69		 Drug Related Products
+ 171		 Tobacco Products - Other
+ 195
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
Category
Symbol
Company Name
Expected Gain1
Best Overall PVG Pretium Resources, Inc. 101
Top Technical PVG Pretium Resources, Inc. 101
Top Fundamental HTBK Heritage Commerce Corp 75
Top Tech. & Fund. NHTC Natural Health Trends Corp. 58
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 MXL MaxLinear, Inc 80
Top Technical HPY Heartland Payment Systems, Inc. 35
Top Fundamental AFH Atlas Financial Holdings, Inc. 56
Top Tech. & Fund. VRSK Verisk Analytics, Inc. 0
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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