Breakoutwatch Weekly Summary 11/02/19
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NASDAQ and S&P 500 Set New
Record Highs. Volatility Squeeze Breakouts most Successful
Another quarter point rate cut by
the Fed and better than expected employment figures lifted the
NASDAQ and S&P 500 to new highs on Friday. The NASDAQ gained
a healthy 1.7% for the week leading the S&P at 1.5% and the
DJI at 1.4. While the outlook is bullish, potentially still
threatening the ongoing rally is the long awaited trade deal
with China. Conflicting comments from the two sides to the deal,
pessimism by China and optimism from the US, mean a substantive
deal may still be some way off.
Volatility Squeeze breakouts led the cup and handle pattern in both quantity and average return. If you are not familiar with the Volatility Squeeze pattern, see the Strategy Suggestions area below.  |
| No new features this week |
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Our latest strategy
suggestions are here.
Volatility Squeeze
A "Volatility Squeeze" occurs
when the volatility of a stock falls below its recent levels.
A fall in volatility usually means that the stock is in a
period of consolidation and trending in a narrow range. When
that period of consolidation ends, normal volatility will
return resulting in a breakout to the upside or downside. If
we can recognize a volatility squeeze situation, then we have
the opportunity to place a long or short position order and
profit from the breakout.
A Volatility Squeeze has usually been recognized by a narrowing of the Bollinger Bands. While this method has its merits, it lacks the objectivity necessary to provide a robust, objective, quantifiable trading strategy, We have developed a refinement of the methodology which allows objective identification of a Volatility Squeeze, We detect a "squeeze" when the 2 standard deviation Bollinger Band (BB) narrows to within the Keltner Channel (KC). Bollinger Bands are very susceptible to volatility changes while Keltner Channels are a smoother, trend following, indicator. Consequently, the narrowing of the BB to within the KC gives us a convenient means of algorithmically recognizing a drop in volatility. While the BB are within the KC, we say the "squeeze is on". For trading purposes, we are interested in the moment when the squeeze comes off, meaning that the upper and lower BB move outside the KC again, which signals a breakout. Of course, the breakout can be to the upside or downside, but for our Squeeze watchlist we are interested only in breakouts to the upside. A squeeze can occur while a stock is trending up or down. For our squeeze watchlist, we are only concerned with stocks trending up. |
| List | Breakouts | Avg. Gain |
|---|---|---|
| CWH | 6 | 3.45 |
| SQZ | 8 | 5.83 |
| HTF | 0 | |
| HSB | 0 | |
| DB | 0 |
| Brkout Date | Symbol | Base | Squeeze | Brkout Price | Brkout Day Close | RS Rank* | Last Close | Current % off BOP | Gain at Intraday High |
|---|---|---|---|---|---|---|---|---|---|
| 2019-10-28 | DCPH | SQZ | y | 36.07 | 39.07 | 98 | 45.46 | 26.03% | 26.25% |
| 2019-10-31 | CSGS | SQZ | y | 52.23 | 57.64 | 90 | 56.45 | 8.08% | 11.53% |
| 2019-10-29 | AMGN | CWH | n | 206.06 | 208.99 | 84 | 217.95 | 5.77% | 6.46% |
| 2019-11-01 | SYNA | CWH | n | 42.88 | 45.04 | 86 | 45.04 | 5.04% | 5.71% |
| 2019-10-29 | VRRM | SQZ | y | 14.29 | 14.38 | 80 | 15 | 4.97% | 5.25% |
| 2019-10-31 | CASY | SQZ | y | 165.83 | 170.81 | 85 | 172.58 | 4.07% | 5.22% |
| 2019-10-29 | NXPI | CWH | y | 113.50 | 114.41 | 82 | 118 | 3.96% | 4.45% |
| 2019-11-01 | NWL | CWH | n | 20.00 | 20.6 | 91 | 20.6 | 3% | 4% |
| 2019-11-01 | VECO | CWH | n | 13.98 | 14.35 | 91 | 14.35 | 2.65% | 4.65% |
| 2019-10-31 | GOOD | SQZ | y | 23.20 | 23.56 | 84 | 23.67 | 2.03% | 3.36% |
| 2019-11-01 | INOV | SQZ | y | 15.64 | 15.9 | 87 | 15.9 | 1.66% | 1.85% |
| 2019-10-29 | OMAB | CWH | n | 54.64 | 55.92 | 82 | 54.78 | 0.26% | 3.35% |
| 2019-10-28 | TTD | SQZ | y | 202.63 | 209.97 | 82 | 203.1 | 0.23% | 6.92% |
| 2019-10-29 | PRFT | SQZ | y | 39.27 | 41.21 | 93 | 39.11 | -0.41% | 6.49% |
| *RS Rank on day before breakout. | |||||||||
| Symbol | BO Price |
BO Vol. |
Company | Industry | RS Rank |
Last Close |
|---|---|---|---|---|---|---|
| APPS | 7.78 | 2,770,624 | Digital Turbine - Inc. | Software - Application | 99 | 7.04 |
| MNTA | 15.99 | 613,474 | Momenta Pharmaceuticals - Inc. | Drug Manufacturers - Specialty & Generic | 91 | 15.74 |
| GLDD | 11.11 | 623,892 | Great Lakes Dredge & Dock Corporation | Engineering & Construction | 91 | 10.76 |
| SBLK | 11.81 | 912,790 | Star Bulk Carriers Corp. - Common Shares | Shipping & Ports | 86 | 11.05 |
| ASUR | 9.33 | 634,692 | Asure Software Inc | Software - Application | 85 | 9.16 |
| PSDO | 16.96 | 1,448,661 | Presidio - Inc. | Information Technology Services | 81 | 16.58 |
| These stocks meet our suggested screening factors
for our Cup and Handle Chart Pattern watchlist. See Revised Rules for Trading Cup and Handle Breakouts |
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| Index | Value | Change Week | Change YTD | Trend1 |
|---|---|---|---|---|
| Dow | 27347.4 |
1.44% | 17.23% | Up |
| NASDAQ | 8386.4 |
1.74% | 26.39% | Up |
| S&P 500 | 3066.91 |
1.47% | 22.34% | Up |
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1The Market Trend is derived from
our proprietary market model. The market model is described on
the site here.
2The site also shows industry rankings based on fundamentals, combined technical and fundamentals, and on price alone. The site also shows daily industry movements. |
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| 1 Week | 13 Weeks | 26 Weeks | Year-to-Date |
|---|---|---|---|
| NASDAQ Composite 1.74 % |
NASDAQ Composite 4.6 % |
S&P 500 4.12 % |
NASDAQ Composite 26.39 % |
| 1 Week | 3 Weeks | 13 Weeks | 26 Weeks |
|---|---|---|---|
| Water Utilities |
Water Utilities |
Diversified Utilities |
Insurance Brokers |
| Publishing - Books 67 |
Department Stores 74 |
Movie Production - Theaters 196 |
Publishing - Books 183 |
| Charts of each industry rank and performance over 12 months are available on the site | |||
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