It’s been a little while since I’ve taken a look at the SelfInvestors Breakout Tracker for a review of the top breakouts.  It’s not a  great time to be pursuing breakout stocks with aggression, but in this report I hope to highlight a few potential leaders if this market turns around.  I personally initiate positions in breakout stocks in difficult markets, but they have to be the best and showing tremendous accumulations.  I limit my risk by initiating smaller positions and take profits and cutting losses much sooner.

In reviewing the breakouts of the past two weeks, it’s clear that it’s still a difficult market for leading stocks (most stocks for that matter).  Just 20 breakouts occurred with ONLY 6 finishing the period with a gain.  On the bright side only Cbeyond (CBEY) and Shengdatech (SDTH) have losses of 8% or more.  So while most leading stocks aren’t providing big gains, they aren’t exactly falling apart quite yet either. 

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Did you know that you can get access to the Breakout Tracker all day everyday and keep on top of fresh breakouts in undiscovered companies for a measly $19.95 month!  You can!  Get all the details here.

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You may click on the image below for a larger view to see the top breakouts of the past 2 weeks.  These are breakout stocks with a total rank (fundamentals + technicals) of 50/60 or above.  Have a look at the Breakout Center tutorial for a complete rundown of what the data in the table indicates (some is not self explanatory such as the DI scores)

There were a few big winners to tell you about, most of which are China based but another that’s considered the Ebay of Latin America, Mercadolibre.com (MELI).  Once it broke out from its first base since going public, it was off to the races and is currently up 25% from the breakout point.  This is why I don’t think it’s a bad idea to dabble in the best of breed breakouts.

There were four big China breakouts over the past few weeks, none of which in companies most are familiar with.  These four could potentially be the next big winners coming out of China so are worth keeping an all eye on.  All 4 are money makers with very good looking charts, including Solarfun Power (SOLF) which I won’t highlight in detail because it’s way too extended from a proper entry point (up 35% from the breakout point!) and not quite as under the radar as the other 3/

The highest rated breakout (score of 52/60) of the period was Harbin Electric (HRBN), a Chinese manufacturer of motor products and systems.  You can see in the chart below that that HRBN broke of a base on base patternn in early December and volume continued to spike higher indicating  tremendous demand.  I see this pullback to the pivot as another opportunity to get in.  I’ll certainly be dabbling a bit more down here.

Shengdatech (SDTH) is the 2nd highest rated breakout of the week and just so happens to be another China play.  SDTH is a China nanotech play.  Bet you haven’t heard that buzzword in awhile!  It too broke out of a base on base pattern just a few days ago but doesn’t quite have the buy conviction behind it that HRBN does.  I’m looking to get into SDTH if it pulls back to the 50 day moving average around 8.  Considering the run it’s had I’m just not willing to put money to work up at these levels.

Fushi International (FSIN) is the 3rd "under the radar China play" I want to highlight today.  The maker of electric wire products and components has been showing nothing but accumulation since it was listed on the Nasdaq just a few short months ago.  Like HRBN, volume levels indicate tremendous demand, so any pullback to the breakout point (or pivot) around 18 would provide an entry point.

Disclaimer: I am personally long HRBN and looking to get longer.

Citron Research (formerly known as StockLemon.com) is at it again.  I first became aware of this site a few years ago but it wasn’t until their profile of Home Solutions (HSOA) that I began to follow their research.  That stock has plummeted to below 2  since Citron began hounding the company.  Despite the rumored questionable past of its founder Andrew Left (there is an entire blog dedicated to it), the company does provide some incredibly in depth research highlighting the shady business practices of certain businesses.  The only problem I do have is that Andrew and certainly its employees take positions in these companies ahead of the reports and undoubtedly profit big time as the disclaimer on the site says:

"The principals of Citron Research most always hold a position in any of the securities profiled on the site.  Citron Research will not report when a position is initiated or covered. Each investor must make that decision based on his/her judgment of the market."

This kind of front running needs to be stopped immediately because it can lead to a fabrication of the facts.  Sure, there are many bloggers out there who write about stocks they own including myself, but when certain websites achieve a wide following and can impact a stock like Citron Research can, it has to be stopped. 

The latest Citron Research report highlights Bidz.com (BIDZ), a stock I recently traded in the Self Investors Model portolio and fortunately closed for a quick 30% gain before this debacle began.  Since that report was published the stock is down more than 50% in just two days and sinking another 3 bucks after hours as the company seeks to calm the nerves of investors.  More on this in a bit.  There are certainly quite a few angry investors out there looking to place blame not only on Citron for running the article, but on IBD who had the stock listed atop the the IBD 100 and recenlty profiled it with a glowing review, not to mention the Roth Capital and Think Equity buy ratings. 

The company obviously had no choice but to respond to this action and chose to hold a conference call.  Big mistake.  Have a listen to the conference call.  During the first half, the CEO just reiterates that the company is strong, reaffirms the numbers, mentions they might pursue legal action.. blah, blah.  The most interesting is the second half when the company takes questions.  Zinberg certainly stumbles a bit when asked about the inflated prices of televisions and a yellow ring currently under auction for half a milion dollars at the site.  I certainly didn’t walk away feeling tremendously confident about this company or its CEO and it’s clear that many others didn’t either as the stock tanked during the latter half of the call.  Eric Savitz of Barrons has a good rundown of the highlights of the call if you’re short on time.

As usual this is most likely a case of "not as bad or as good as it seems".  The important thing to remember is that there are a ton of great companies out there run by management with a long history of success so why look at this at a buying opportunity?  There are just too many questions to be answered.   More importantly, why were these angry traders hurt so badly?  The kind of selling volume that BIDZ was seeing on Nov 26th and a close at the lows of the day should have at the very least got you out of the stock with a small gain (had you bought at the proper breakout point above 15.19).  I personally love this kind of volatility for day trading and believe it could run up 20 – 30% within the next day or two, but to be a "buy and holder" of this stock right now is in my opinion a mistake.

It should be interesting to see how this story unfolds over the next few months.  Keep in mind that Citron Research is expected to come out with a second part to their Bidz.com (BIDZ) research detailing the bid rigging allegations  very soon which could further derail the stock. 

Disclaimer: I don’t currently have a position in Home Solutions (HSOA) or Bidz.com (BIDZ)

Today, I wanted to bring to you a screen of the SelfInvestors Breakout Tracker.  This particular screen filters out leading stocks that are showing significant demand and above both the 50 and 200 day moving averages.  They are holding up remarkably well despite a market correction and many of these will most likely lead the market once we begin to turn around. 

Please click the image below to see the top stocks sorted according to Total Rank (Fundamentals + Technicals).
This is absolutely not a buy list.  Please pay attention to the Pivot points listed in the table as well as the stocks in relation to their support levels and please do your own research. 

If you’d like to receive the full list in an excel download (about 60 stocks), you can register for a free Bronze membership to the left there and get access to the archives of all the excel screens.  I’ll be releasing this screen to members within the next several hours.

One thing I try and do here at SelfInvestors is preach risk control and capital preservation during unusual volatility or down markets like we’ve seen recently.  The reason for this is because 3 out of 4 stocks will move with the market, so a fully invested strategy in high growth stocks like the ones that I focus on can lead to disaster if you’re not careful.  How to protect yourself?  The easy answer is to move significantly to cash as I’ve been recommending now for a couple months.  However, if you are playing breakout stocks I highly recommend scaling into positions.  That is initiating a purchase with a much smaller amount and only adding more to it if market conditions improve and the breakout continues to look bullish.  Combine that with a mantra of KEEPING LOSSES SMALL and you should weather the storm just fine.

With that said I’d like to take a look at the top breakouts tracked by SelfInvestors.com over the past two weeks with a rating of 50/60 or better.  What you’ll find is a much much lower success rate than what you’d find in a strong or even flat market.  I know, no surprise there but it’s a good reminder how even the very best companies can falter in a down market.  I had a member the other day email me upset their stock took a bit of a beating.  The stock was TSL, one of the highest rated stocks.  They couldn’t understand how a stock that was supposed to be so highly rated could sell off so hard.   Well, most stocks fall in a down market with the smaller, high growth stocks often getting hit the hardest.  There are tremendous premiums built into these stocks and their runs can be further fueled by momentum players, so once things begin to unravel it’s important to protect yourself and avoid too much risk as they are much more vulnerable to large losses.

As always, please click on the image below for an enhanced "eyeball ready" version of the breakouts list.  If you’re at all curious about how the Breakout Tracker was put together and what all that data means here’s a good resource: A detailed look at all the Breakout Tracker data.

Taking a look at the data of the past two weeks, there were 20 breakouts tracked by SelfInvestors.com with only 5 finishing the two week period with a gain and 15 finishing with a loss.  On the bright side, only one stock, Trina Solar (TSL) would have stopped you out with a loss and was the biggest loser with a 19% loss.  Expeditors International (EXPD) would have too, but it didn’t confirm a breakout due to a lack of volume on the breakout move, so it should not have been purchased.  The biggest winner award belongs to eHealth (EHTH) which has vaulted 18% since breaking out and actually broke from another bullish formation (triangle pattern) today for further gains.  This is a stock I was focusing on in the live chat room today and picked up some nice profits in an otherwise dismal day. 

The stock broke out of a long, deep base above 29.50 on Nov 2nd and has not looked back.  This is the first base breakout of the stock since going public late last year.  Today, the stock surged again out of a bullish triangle formation and is up about 20% from the original breakout point.  I personally put on a swing trade in EHTH today and am looking for a bit more profit tomorrow.  I don’t recommend getting in on it up at these levels, it’s much too extended now.

Full Disclosure/Disclaimer: The stock of the day is by no means a buy recommendation.  Please do your own research and make a personal decision based on your own tolerance for risk.  I currently do own a position in eHealth (EHTH)

Hola fellow earthlings.  It’s time again for another extraordinary edition of the breakouts stocks review.   With the Dow and S&P in unchartered territory comes breakouts and lots of them.  The highest of the high quality breakouts were made in China and the shippers didn’t fare too badly either.

As always, please click on the image below for an enhanced "eyeball ready" version of the breakouts list.
If you’re at all curious about how the Breakout Tracker was put together and what all that data means here’s a good resource: A detailed look at all the Breakout Tracker data.

Over the past few weeks there were an unusually high number of high quality breakouts.  This is just an appetizer.. the full, all you can eat buffet of breakouts is provided to the appreciated people who support my research with a kind donation from time to time.

At the top of the list we begin with.. I thought that was a China play! No,  Gmarket (GMKT) hails from the freedom loving, tech savvy  nation of South Korea.  Either way, this is a company with tremendous growth since posting profitability in 2005.  The stock went public in summer of ’06 and provided the first opportunity to get in after breaking out just a couple months later in October.  It’s October once again and the stock is up to its old tricks, breaking out with a vengeance.  It offered the first entry opportunity on a break above the handle formation of a cup with handle formation .10 above the pivot point at 24.58 on October.1st.  Since then it’s gone on to bust out to new all time highs.  Considering the run it’s had and the vulnerability of the overall market right now, I’d be patient with this one if you don’t already have a position.  I personally don’t own a position and will wait for a pull back to around the first point of entry which would provide a good lower risk entry.

There were China breakouts in the past 2 weeks.. really there were.  Check out Trina Solar (TSL) but don’t be fooled into thinking that’s the best China solar play.  That award belongs to JA Solar (JASO), which broke out at the end of September.  Another China breakout on the list is medicinal plant producer [Medicinal plant producer makes it sounds like they grow grass.  Let me rephrase that.  Developer of plant based pharmaceutical and nutraceutical products.  Ok, now they sound legit.] American Oriental Bioeng (AOB), one of the few China plays that doesn’t sport an "off the charts" valuation.    It looks like it might pull back a bit more here, so keep an eye on it for another entry point (it broke out at 11.95 from a double bottom base).

..and how about those Greek Shippers!  Quintana Maritime (QMAR) and Diane Shipping (DSX) were both featured as trades of the day on October 2nd as they busted out to new all time highs.

Last but not least, you have to pay attention to a few of the highest rated oil breakouts over the past couple weeks – Diamond Offshore (DO), GlobalSanaFe (GSF) and Transocean (RIG).  Is it any coincidence that all three are offshore drillers? NO!  These guys find oil under hundreds of miles of ocean water.  Barrier to entry.  Stronger than the US/Mexico border.  Profit margins through the roof.  Your profits over time .. not too shabby.

Disclaimer: The only stock I currently own personally is Diana Shipping (DSX) but am considering them all for purchase in the future.

The Breakout Tracker has been the cornerstone of the premium service since day 1 and is a database comprised of the best companies in the world that are near a breakout or have broken out of a base (ie. cup with handle, flat, base on base, ascending, etc).  All stocks are analyzed and ranked by me before they ever make it to the database, guaranteeing only a database of the best.   The Breakout Tracker combines the power of the human element of stock research with the updating, sorting and filtering capabilities of a dynamic database, alerting members to buying opportunities in the highest quality stocks with very little research.

The following list is a screenshot of the Breakout Watch filter which spits out a list of the highest ranked stocks that are near a breakout or within 5% of the pivot (or breakout) point. Only the top 9 are shown in the image below.  Note: Fundamental Rank (F Rank) and Technical Rank (T Rank) are ranked from 0 – 30, 30 being the best. 

One other important thing to point out are the DI Scores, which are proprietary indicators of SelfInvestors that basically measure the demand in a stock using price and volume data over 20 and 40 days.  The higher the score, the greater the demand.  Here’s a detailed look at all the Breakout Tracker data.

At the top of the list this time around is ShoreTel (SHOR) a highly rated VOIP provider that recently IPO’d.  The stock just broke out of its first base since going public and based on my analysis of past highly rated IPO’s that break out, the odds are definitely in favor of more upside from here.  Note in the chart of SHOR below that the stock did take out support of the pivot point with heavy volume on Friday.  It was able to recoup all of those gains yesterday, but not with good volume.  I’d give this one a few days to sort itself out and see if the high volume drop on Friday was just an aberration.

Next on the top breakouts list is Trina Solar (TSL).  Keep in mind that while the stock triggered a breakout in my system yesterday, it could still continue forming a handle considering this consolidation has just been a few days.  If it can’t clear yesterday’s highs and hold there, I will probably reset the pivot point on this one.

Not surprising, Google (GOOG) is right up there as well after having busted out of a cup with NO handle base.  I really thought it would digest gains a bit more and retest the area around 550 before moving higher, but based on yesterday’s move, it may not do any "resting" for some time!  I continue to hold my long term position in Google and looking to add shares on a decent pullback.

Stocks that have yet to breakout on the list include two highly rated Chinese companies – American Oriental Bioeng (AOB), the Chinese provider of plant based pharmaceuticals and Suntech Power Holdings (STP).  Considering the overall momentum in Chinese stocks, it may be just a matter of time before these highly rated companies bust out of their bases.

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Keep tabs on all of the highest rated breakout stocks with the Breakout Tracker by signing up for SelfInvestors Gold Membership today!  You’ll also receive the IPO Tracker, the ETF Tracker and Model Portfolio buy/sell alerts.

It’s time to return to the bi-monthly reviews of the SelfInvestors.com Breakout Tracker.  The Breakout Tracker has been the cornerstone of the premium service since day 1 and is a database comprised of the best companies in the world that are near a breakout or have broken out of a base (ie. cup with handle, flat, base on base, ascending, etc).  All stocks are analyzed and ranked by me before they ever make it to the database, guaranteeing only a database of the best.   The Breakout Tracker combines the power of the human element of stock research with the updating, sorting and filtering capabilities of a dynamic database, alerting members to buying opportunities in the highest quality stocks with very little research.

The following list is a screenshot of the Breakout Watch filter which spits out a list of the highest ranked stocks that are near a breakout or within 5% of the pivot (or breakout) point.  Note: Fundamental Rank (F Rank) and Technical Rank (T Rank) are ranked from 0 – 30, 30 being the best. 

One other important thing to point out are the DI Scores, which are proprietary indicators of SelfInvestors that basically measure the demand in a stock using price and volume data over 20 and 40 days.  The higher the score, the greater the demand. 

Please keep in mind that while there are some great looking opportunities in this list, the current market environment makes initiating positions more risky, so scaling into positions with small initial buys or avoiding positions altogether is probably the best course of action.  Of course, ALWAYS do your own research.. but you knew that 🙂  With the disclaimers out of the way, I’d like to highlight one breakout stock in particular – Simulations Plus (SLP).  The thin trading volume, lack of institutional ownership and the fact that the company did just over 6 million in sales in ’06 may cause concern for some but this also indicates it’s off the radar and could continue to provide explosive gains if the company can continue the growth it has posted over the past year and a half.  Technically, the base looks outstanding with a beauty of a breakout from a cup with handle base today.

Disclaimer: I currently own a small position in SLP.

Due to meandering action over the past several months, Google (GOOG) hasn’t been a hot stock in trader circles for quite awhile (as evidenced by the declining trading volume) and that’s just the way I like it.  After all, big breakouts occur when most people aren’t watching.  That big breakout is coming very soon in my opinion.  As volume dries up, price has been getting squeezed at around 475.  Eventually, it’s gotta give.  The most likely scenario in this kind of formation is a breakout in the direction of the preceding trend which in this case is up.  One more high volume move from Google (which would indicate a breakout from this bullish triangle formation) and look out above!

Note: this chart snapshot was taken yesterday – this morning Google is breaking out of this formation.  However, I wouldn’t get aggressive on the long side just yet with the market a bit shaky up here.  Good place to begin dabbling though.

Disclaimer: I do have a long term position in Google and will be adding more soon.