Breakoutwatch Weekly Newsletter 11/21/15

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.

Weekly Commentary

The NASDAQ Composite continued to outperform the broader markets with a robust gain for the week (Friday to Friday close) of 3.6%. The strong performance this week allowed the index to form the handle of a cup and handle pattern. Because the index reflects the aggregate performance of stocks in the index we would expect there to be a large number stocks in a cup and handle pattern also. This is in fact the case, with 234 stocks making our cup and handle watchlist after Friday's close. This is more than double  the number of cup and handle  pattern candidates a month ago. If the upward trend continues, then we can expect a fairly large number of attempted breakouts. In this situation it is important that you have done your due diligence and have prepared a short list of stocks on which you are ready to pull the trigger. See more advice in our top tip below.

NASDAQ Composite Chart
Weekly Breakout Report

Of the 47 breakouts this week, 27 of them were from a cup and handle pattern, which is consistent with my comments above regarding the predominance of the CwH pattern. 15 breakouts were from a Volatility Squeeze (SQZ) pattern and 4 from a head and shoulders (HSB) bottom.

Breakouts for Week Beginning 11/16/15
Brkout Date Symbol Base Squeeze BrkoutOut Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
11/18/15 SRPT SQZ Y 27.34 27.72 97 33.36 22.02 22.02
11/16/15 BAK CwH N 12.49 12.51 96 14.52 16.25 16.25
11/20/15 ORMP CwH Y 7.44 8.28 92 8.28 11.29 11.29
11/16/15 LPCN SQZ Y 13.18 14.38 98 12.74 -3.34 9.1
11/20/15 LMAT CwH N 14.74 15.77 98 15.77 6.99 6.99
11/17/15 ALK SQZ Y 76.86 77.54 88 81.86 6.51 6.51
11/18/15 ZEN CwH Y 24.16 24.90 82 24.94 3.23 6.5
11/17/15 REXR CwH Y 15.50 15.56 83 16.41 5.87 5.87
11/16/15 UNTD HSB N 11.35 12.01 21 11.52 1.50 5.81
11/16/15 BERY SQZ Y 34.93 35.48 86 36.54 4.61 5.44
11/18/15 REXR SQZ Y 15.58 15.97 81 16.41 5.33 5.33
11/20/15 ANW HSB N 8.24 8.66 13 8.66 5.10 5.1
11/16/15 BMA CwH N 64.88 65.00 95 68.02 4.84 4.84
11/18/15 PBF CwH N 36.59 38.15 92 38.27 4.59 4.59
11/18/15 LAWS SQZ Y 27.29 27.63 85 27.76 1.72 3.63
11/20/15 BMA CwH N 65.66 68.02 96 68.02 3.59 3.59
11/18/15 TSEM CwH N 15.70 16.26 87 16 1.91 3.57
11/19/15 PLAB CwH N 10.26 10.57 92 10.62 3.51 3.51
11/17/15 OC SQZ Y 46.52 46.85 89 48.01 3.20 3.2
11/20/15 VCRA CwH N 12.93 13.31 91 13.31 2.94 2.94
11/18/15 STC SQZ Y 41.62 42.64 85 42.47 2.04 2.45
11/17/15 UVV CwH Y 55.62 56.01 94 56.92 2.34 2.34
11/20/15 TTS CwH N 15.90 16.26 96 16.26 2.26 2.26
11/19/15 AGX CwH Y 38.96 39.82 83 39.63 1.72 2.21
11/18/15 ORBK CwH N 18.98 19.31 85 19.35 1.95 1.95
11/18/15 AFH SQZ Y 19.08 19.36 87 19.43 1.83 1.83
11/18/15 KITE CwH Y 85.31 86.85 98 82.93 -2.79 1.81
11/17/15 ERIE CwH Y 90.02 90.57 81 91.52 1.67 1.69
11/18/15 UVV SQZ Y 56.04 56.16 94 56.92 1.57 1.57
11/18/15 MKL CwH Y 887.17 896.00 84 900.47 1.50 1.5
11/20/15 ETM HSB N 11.25 11.41 55 11.41 1.42 1.42
11/20/15 AOSL CwH N 9.50 9.62 91 9.62 1.26 1.26
11/18/15 ERIE SQZ Y 90.52 91.54 80 91.52 1.10 1.13
11/18/15 EBS CwH N 36.98 37.01 93 37.37 1.05 1.05
11/20/15 VNET HSB N 19.85 20.04 62 20.04 0.96 0.96
11/18/15 AMCC CwH N 7.47 7.54 95 7.33 -1.87 0.94
11/18/15 ORAN CwH N 17.85 17.95 83 17.55 -1.68 0.78
11/17/15 SRSC CwH Y 8.42 8.48 92 8.21 -2.49 0.71
11/20/15 UVV SQZ Y 56.54 56.92 94 56.92 0.67 0.67
11/17/15 LEAF SQZ Y 49.10 49.4 88 47.42 -3.42 0.61
11/19/15 MKL SQZ Y 895.83 900 86 900.47 0.52 0.52
11/17/15 PTLA SQZ Y 49.76 49.79 97 49.3 -0.92 0.48
11/20/15 MFLX CwH N 22.73 22.83 96 22.83 0.44 0.44
11/20/15 BFR CwH N 24.67 24.77 97 24.77 0.41 0.41
11/20/15 DLPH CwH N 85.93 86.21 81 86.21 0.33 0.33
11/19/15 ORAN SQZ Y 17.96 17.99 84 17.55 -2.28 0.17
11/19/15 WB CwH N 18.00 18.02 91 17.84 -0.89 0.11
Weekly Average (47 breakouts) 2.56 3.57
*RS Rank on day before breakout.

New Features This Week

Most of my content is in tabular form which doesn't play well on mobiIe devices. I am continuing to work on making the key  tables "responsive" with the Market Analysis page  being the latest to receive this treatment.
Top Tip of the Week

As noted above, it is likely that there will be a potentially large number of breakout alerts coming from our cup and handle watchlist next week. It is timely, therefore, to remind subscribers of our suggested filter settings for our CwH watchlist:
  • Each day, create a personal watchlist of stocks that satisfy
    • RS Rank must be at least 90
    • Industry Rank must be in the top 20 percentile (i.e. have a rank less than 43 in our industry ranking scheme
    • Average daily volume >= 100,000.
  • If market trend is positive, buy on alert
  • Sell at next open if volume at end of breakout day is less than 2 times average 50 day volume
  • Sell if stock drops 6% or more from the breakout price.
  • If stock rises above breakout price after purchase, set a 3% trailing stop by monitoring daily high's and setting a stop loss at 3% of the maximum high after breakout. Adjust daily if necessary.
  • Sell if trailing stop met intraday.

See newsletter of 10/2/2015.
Major Index Summary
Index Value Change Week Change YTD Trend1
Dow 17823.8
 3.36% 0% Up
NASDAQ 5104.92
 3.59% 7.79% Up
S&P 500 2089.17
 3.27% 1.47% Up
1The Market Trend 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.
Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
3.59 %		 NASDAQ Composite
8.48 %		 NASDAQ Composite
0.31 %		 NASDAQ Composite
7.79 %
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
1 Week 3 Weeks 13 Weeks 26 Weeks
Most Improved Industry (by change in technical rank2)
Diversified Computer Systems
+ 50		 Diversified Computer Systems
+ 126		 Diversified Computer Systems
+ 156		 Long Distance Carriers
+ 168
Charts of each industry rank and performance over 12 months are available on the site
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 HCHC
 HC2 Holdings, Inc.
 121
Top Technical HCHC
 HC2 Holdings, Inc.
 121
Top Fundamental TREE
 LendingTree, Inc.
 48
Top Tech. & Fund. TREE
 LendingTree, Inc.
 48
1This is the gain predicted by our Expected Gain model within 6 months of breakout which uses the volume on breakout as a predictive term. Because the model variance is +/- 38% the expectation can be negative.
Top Second Chances: Stocks that broke out this week and are still in buyable range
Category
Symbol
Company Name
Expected Gain1
Best Overall AMCC
 Applied Micro Circuits Corporation
 89
Top Technical BFR
 BBVA Banco Frances S.A.
 63
Top Fundamental TTS
 Tile Shop Hldgs, Inc.
 0
Top Tech. & Fund. TTS
 Tile Shop Hldgs, Inc.
 0
1This is the gain predicted by our Expected Gain model within 6 months of breakout 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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