The number of breakouts over the past couple of weeks confirms my suspicions that leading stocks aren’t leading.  It’s a surprising divergence.   Usually, with a rise in the markets like we’ve had, I’ll see maybe 40 or so breakouts over a 2 week period, not 17. 

Some Highlights:

• Eleven breakouts finished the period with a gain, 4 with a loss and 2 finished flat.
• The biggest winner over the period was one of the top ranked retailers in the database, Coldwater Creek (CWTR), which broke out to a 19% gain following another outstanding earnings report.
• Two stocks win the coveted biggest loser award, dropping 9% each from their breakout points – Mesabi Trust (MSB) and LifeCell Corp (LIFC)
• Glenayre Technologies (GEMS) is showing the greatest demand of the 17 breakouts over the past 20 and 40 days with DI Scores of 71 and 78, respectively.

For a screenshot of the short list of stocks breaking out with a combined fundamental and technical score of 50 or above, please visit the following page.

The screenshot shows only those breakouts with a combined fundamental and technical score of 50/60 or above.  To see the entire list as well as many other screens you’ll need to sign up for premium membership.

I’ve got some hoops to go watch so I just wanted to highlight one stock quickly that I think represents one of the best opportunities in the market right now.. I’ve been mentioning this one to my premium members over the past couple of weeks and it still remains in what could be called a "buyable range" (within a few percentage points of the breakout point of a long 2 year base).  Notice the up versus down volume, its outstanding and today’s reversal occurred with light volume so not much of a concern there.  Keep an eye on this one.  Have a good night.

The last couple of weeks certainly hasn’t seen a flurry of breakouts with a total of 27 breakouts out of the nearly 800 stocks that I track.  A more typical 2 week period might see somewhere in the neighborhood of 40 – 50 breakouts.  However, the success rate was very good with 19 breakouts ending the period with a gain and none hitting an 8% loss.

As usual, here’s a screenshot of the top breakouts over the past couple of weeks with a link to a larger version (so you can actually read it – imagine that)

The biggest breakout of the period belongs to Kendle International (KNDL) with a 20% gain from the breakout point.  Kendle is a highly ranked provider of clinical research and drug development services to the pharmaceutical and biotechnology industries.

The big loser.. well, there really weren’t any.  Two ended the period with a 2% loss (ASF and WEBX) and 2 ended the period with just a 1% loss (RL and VTIV). 

With oils and commodities no longer leading the market, new industries appear to be emerging to take the lead.  Medicals continue to do well, especially in the biotech arena.  Pay attention to this area.  I’ve never been a big fan of buying bank stocks but they have been showing signs of life and I’ve been noticing a pickup in breakouts in this sector.  The problem is most of them are highly illiquid.  If you don’t mind trading bank stocks that trade less than 50K shares a day, you may be able to find quite a few opportunities.  There is one bank stock that I like, which I’ve highlighted in the past – Wilshire Bank (WIBC).  Wilshire is the highest rated bank stock that I track and it broke out this week from a nice flat base with very heavy volume.

In the medical space, two highly rated companies broke out to new highs in the last couple weeks – Kendle (KNDL), which I mentioned above and A.D.A.M (ADAM), a company engaged in the creation and delivery of interactive health information marketed to health and educational organizations.

As you can see in the chart below, I’m calling the first breakout point above 26.44 as the stock cleared what could be called the middle peak of a funky looking double bottom base.  No it’s not perfect.  The second opportunity occurred after the stock cleared a new all time high above 29.50.  I probably would have avoided purchasing here given the quick rise.  I’d be more confortable initiating a position on an orderly pull back to around the all time highs (29 – 30) with declining volume.  It may be on its way to do that now, possible setting up another opportunity.

ADAM is a stock I’ve been watching for some time and have continued to be impressed with the technical action.  It rarely gets better than this.  Fairly tight price action, outstanding up vs down volume.. clearly there continues to be great demand for the stock.  The move up on Friday occurred with disappointing volume but other than that it still looks very good.  The selling of the past 2 days has not been particularly intense.  I would not be surprised to see the stock return to the breakout point at around 10 in the coming days, possibly setting up an opportunity for those who may have missed the initial move.  Just keep in mind that earnings are coming up on March 14th which will undoubtedly create some increased volatility.

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To wrap up this post I wanted to provide a link to the top breakouts of the first couple weeks in February.. it was a post I was in the process of writing before I developed the bursitus in the arm and never got a chance to finish it up.  Hope you find some opportunities in this list as well. 

It’s been a good start to the new year, with breakouts in small to mid caps doing especially well.  The number of breakouts increased in the last half of January with a total of 59 stocks breaking out (from the pool of around 800 companies that I follow).  Once again oil, commodities and metal did well.  Cement and railroads have also been surging.

The screenshot below provides a glimpse of the SelfInvestors.com database screen that returns the top breakouts of the past 2 weeks.   Please go here to see a larger view of the screenshot. 

The screenshot shows only those breakouts with a combined fundamental and technical score of 50/60 or above.  To see the entire list as well as many other screens you’ll need to sign up for premium membership. 

The biggest winner in the period was Empire Resources (ERS), which vaulted more than 30% after clearing all time highs above 14.  In fact, many steel and aluminum stocks have done extremely well in the past couple weeks.

As a clear sign of strength of breakout stocks in the past couple weeks (and a good indicator of market strength as well), the worst performing breakout stock (First Republic Bank – FRC) dropped 8% from the breakout point.  No other breakout ended the period with a loss larger than 3%.

There are some nice looking opportunities in this group.. I’m short on time tonight so I’ll leave the charts to you.  However, if anyone would like a further analysis of any of the stocks above I’d be happy to add the chart at a later time.. Just go ahead and leave a comment.

After Friday’s plunge I thought it would be interesting to take a look at the top 50 or so best performing stocks for the day excluding any oil related stocks (which for the most part were all up for the day) as well as those that moved on good earnings.  I wanted to capture a list of stocks with just good old fashioned underlying strength that bucked the trend on Friday.  It stands to reason that these stocks have a great chance of doing particularly well if the market can right the ship and keep the rally intact.  Please note that these are not buy recommendations and in fact several may be too extended.  However, the charts look solid.  I’ll leave the rest up to you.  It’s getting late late and I’m exhausted, so I’m not going to bother with the charts in this post.  Here’s my list ordered according to my fundamental rank for each stock.

Tenaris (TS) [rank 27/30]
Ceradyne (CRDN) [26]
Ipsco (IPS) [26]
Schick Technologies (SCHK) [26]
Silicon Motion Tech (SIMO) [26]
Turkcell (TKC) [26]
Fording Canadian Coal (FDG) [26]
Color Kinetics (CLRK) [26]
Carters Apparel (CRI) [25]
Middleby (MIDD) [25]
Banco Santander Chile (SAN) [25]
Bright Family Solutions (BFAM) [24]
Unica (UNCA) [24]
US Global Investors (GROW) [24]
Falconbridge (FAL) [24]
First Republic Bank (FRC) [23]
Toronto Dominion Bank (TD) [22]
CPFL Energia (CPL) [22]

In a complete reversal from last year, traders have been in a buying mood to start ’06 and that’s been reflected in the number of breakouts over the past 2 weeks, which have numbered 38.  The success rate was decent with more than half (20 to be exact) ending the period with a gain.  The breakouts were led by ENGlobal (ENG), which vaulted 23% afer breaking out.  You may remember that ENGlobal was highlighted in the last breakouts report on January 3^rd along with PetroChina (PTR).  Just as oil related stocks led the way during the last 2 week period, well.. they did it again.  Oil led the way, with a fine supporting cast of steel and mining related issues.  With expectations that interest rate hikes are coming to an end, homebuilders and REITs fared quite well too.

The screenshot above provides a glimpse of the SelfInvestors.com database screen that returns the top breakouts of the past 2 weeks.  Yeah, I know you can’t read it.. it’s there purely for aesthetic reasons  Please go here to see a larger view of the screenshot.

The screenshot shows only those breakouts with a combined fundamental and technical score of 51/60 or above.  To see the entire list as well as many other screens you’ll need to sign up for premium membership. 

I’d like to highlight a few of the top breakouts that aren’t too extended and remain promising buy candidates.  I’ll start off with the highest ranking breakout of the past 2 weeks, Wilshire Bank (WIBC).  Personally, I’m not a big fan of investing in banks (unless they’re foreign), but Wilshire is one of the best around and its a promising looking breakout.  One to watch for sure.

Next up is LCA Vision (LCAV), a stock I highlighted in a report to premium members on October 31st (you can see the full report here).  This is a stock I purchased well below the formal pivot because I felt that purchasing after filling the gap offered a much better reward to risk trade… and actually you wouldn’t have wanted to purchase on a break above that pivot because of the severely sloping handle.  The stock has been forming a much more orderly handle over the past several weeks and broke above it.  While this outstanding company looks ready to move to all time highs soon, the sharpness of the base (see the V like pattern), gives me a bit of hesitation.  I’d probably hold off on the breakout and wait to see how it consolidates after breaking to new highs just to be on the safe side.

The breakout to all time highs in Meridian Biosciences, has given way to a classic, bullish pennant formation.  It may spend a few more days consolidating, but this one looks like its moving higher in a hurry at some point.

As mentioned above, many oil related stocks broke out again in the past couple weeks and Ultra Petroleum is fundamentally the highest rated oil stock that I track (and probably in the top 2% of all stocks that I track).  You’ll notice that the action in UPL has gotten a little on the sloppy side compared to past movement indicating that more traders have it on their radar, but as long as oil stays above 60/barrel it should hold the breakout and continue on to nice gains.  Earnings season will get under way in force in the next couple weeks and I would bet you’re going to see these oil companies smashing estimates once again, just as they did last quarter.

Techne (TECH) is a biotech supplier that grows with incredible consistency.  I really like the base in this one and technically the stock has broken out, but I’d like to see it get above 60 with volume just to make sure.

I’m a big fan of the flat base and FreightCar broke out from a great looking one last week with good volume.  Looks like a nice reward to risk trade here as transportation stocks continue to do well, especially railroads.  Have a look at Wabtec (WAB) too.. one of my favorites in the railroads industry.

Yesterday I alerted premium members of SelfInvestors.com to a breakout in True Religion (TRLG), the rapidly growing high end jeans manufacturer.  The following is a follow up I report I sent to members last night to highlight the process that went into tracking the stock and making the purchase.  I wanted to share it on the blog as well because I think it illustrates well when it’s OK to purchase before the "formal" pivot point. 

"I wanted to write up a short report on the process that went into locating True Religion (TRLG) as a buy candidate and ultimately pulling the trigger on a trade.  As is the case with nearly all purchases in the Model Portfolio, TRLG has been listed atop the Breakout Watch screen for several days.  Believe it or not, I actually use this system I’ve been building over the past couple years! .. and it has been a key part of my research process, enabling me to pinpoint the best opportunities in the market each day very quickly.  I know that it can do the same for you too.  With the addition of the email alert system to SelfInvestors.com, you don’t even need to log in to track the best candidates in the Breakout Watch screen.  If you are a premium member, you may sign up to have this email delivered to your inbox.

As I do with all stocks that appear in the screens, I pulled up the chart of TRLG in order to get a better read on the health of the stock and to see if there may be a better buy point than what could be had by purchasing at the formal pivot point (.10 above the high of the handle formation).  In this case, the chart looked good with a surge in price and volume in the right side of the base followed by healthy consolidation.  The stock consolidated into a bullish triangle continuation pattern where prices converge to a point (forming a triangle) in conjuction with a dry up in trading volume.  It’s called a continuation pattern because typically the end of the convergence leads to a continuation in the direction of the previous movement (in this case up!!).  Of course these patterns aren’t ALWAYS successful, but more often than not they are.  In the chart of TRLG below you can see today’s "continuation" out of this bullish pattern, offering a better buy point then the formal pivot of 17.70.

Once I’ve located the stock in the SelfInvestors database, looked over the chart and determined where an entry point might be, I’ll set a real time alert around 1% below the potential buy price.  In this case I figured the stock would intially break out of this pattern around 16, so this is where I set my alert.  Once I’m alerted to the price, I know the stock may be on the verge of the move I’ve been waiting for, so I’ll begin to watch it closely in real time and have the order information inputed, so that all I have to do is click submit once the price is met.

I make buy and sell decisions by looking at a real time intraday 5 minute chart.  Below youi’ll see today’s intraday chart of TRLG and the buy point around 16.30.  Yes, bases work on the intraday charts too!  See the breakout from the cup base with handle today at around 2:30PM EST?  I never make a purchase if a stock has run up in the first half hour to hour of trading and will often wait for the stock to clear the high of the first hour of trading.  What the runup early this morning did was trigger my alert at 16, indicating this was one to watch closely throughout  the day.  Since I now had my high of the day I could set another alert just below that so that I’m not watching it all day (usually I have much better things to do!).  I set another alert at 16.20, which it triggered at 1:30PM EST.. and at that point it was time to watch closely for a breakout above the high of the day, which it finally did.  I had the order ready and pulled the trigger on the buy.

Hopefully I haven’t made this sound more complicated than it is!  Do yourself a favor and subscribe to a real time charting service with real time alerts (your broker or trading platform may include this), but a separate program may be best.  Esignal and TCNet are popular real time charting systems.  I’d also recommend investing in another monitor so you’re not having to minimize windows left and right.  You can just throw in another video card into your existing computer and pick up a very good CRT monitor for cheap these days.  The more computers and monitors, the better!"

If you are new to investing and have any questions at all about this process please don’t hesitate to contact me at support@selfinvestors.com. I’d be happy to answer any questions you may have.  Or you can leave a comment below if you’d like.

It had been a slow couple of weeks for breakout stocks as the market worked off recent gains, consolidating to major support areas.  That is until today’s big reversal following the release of the Fed minutes, indicating rate hikes are nearing an end while inflation remains in check. Today’s move was critical in that support in the major indices were dangerously close to being violated (in fact, the Nasdaq had breached support of the 50 day moving aveage early in the trading day).

With today’s big reversal came a surge in breakouts, primarily from the oil sector.  Oil had begun surging a few weeks back when I highlighted them in the last breakout stocks report, and today a climb in crude sparked another round of breakouts in the sector.  In all, 8 stocks in the oil sector broke out, led by highly rated PetroChina (PTR) and EnGlobal (ENG).

Here’s a screenshot of stocks that have broken out over the past 2 weeks, with a total rank of 50 or higher.  For a much larger view please have at this page.

PetroChina broke out today after consolidating for a month in the right side of a decent looking base.  Expect some resistance around 85 and 90 as it approaches all time highs.

ENGlobal continues its bullish action with today’s breakout move from the short handle.  The chart below shows a couple of high volume reversals (one from 10.96 and one from 9.20, which are negative, but those are most likely data glitches since they don’t show up in charts from other services).  I like that high volume gap up in the right side.

Be sure to take a look at the charts of other highly rated breakouts in the screenshot above..

Time again for another screen of the SelfInvestors.com database -this time around I’ve chosen to filter the database to return to me all the ADR’s i’m currently tracking, listed in order of Fundamental Rank.  Many are extended past a proper buy point, but there are a few interesting set ups I’d like to highlight on both the long and short side.

To see a screenshot of the Top 8 ADR’s currently in the system, you can click here.  If you’re not currently a free member of SelfInvestors.com you can sign up to receive the full list of ADRs via an excel spreadsheet.  Current members may access the download at this page.

So, here’s a couple on the long side I’d like to highlight – China Medical (CMED), Tenaris (TS) and Internet Initiative (IIJI).

After a tremendous run through most of November, CMED is currently carving out what looks like a decent bullish triangle pattern.  That high volume reversal at the top is a bit of a concern, but as long as the stock continues to find support around 30 and volume continues to dry up, the stock has a good chance of staging a nice break from the pattern.  Look for the stock to spend some more time filling out the pattern before making a significant move from here.

I think this chart looks great despite the fact that it is a late stage base (so prone to a higher rate of failure).  The stock broke out of a double bottom base with good volume above 120 and has been quietly consolidating around the break out point.  If the stock drops below support around 120 with heavy volume, I’d move on with just a very small loss.  Nice reward vs. risk trade here.

IIJI staged an impressive breakout on Dec 1st, then reversed sharply  the very next day.  I haven’t been able to determine exactly why the reverse happened, but it’s probably a combination of the secondary offering, a bearish "Cramer" call and general weakness within the industry.  Notice that the selling hasn’t been particulary intense as sell volume continues to decrease.  I’m typically a little wary of stocks that make wild swings like this, but if the stock can find support at the 50 day moving average and bounce with good volume, it might provide a nice swing trade for a quick profit.

I’ve noticed a few decent looking short set ups amongst the ADR’s too.

It’s amazing how similar the charts of PKX and MBT look.  Both appear to be on the verge of another breakdown if they can’t hold current support levels (as outlined in the charts below).   

CBI has bounced back after the selloff due to alleged accounting improprieties which led to a delay in reporting results.  These kinds of problems tend to linger for a long time, holding the stock price down.  The stock is currently meeting resistance of the 50 day moving average as buy volume wanes.. setting up an interesting short trade.  I’d probably wait and see how it does with potential support at the 200 day moving average (25/share) before making any decision on a short trade.

I’m still alive:)  I’ve been preoccupied with unexpected events recently… and I apologize for the lack of posts.  This blog is important to me and I want to be consistent about posting here and keep readers on top of the market.  With that said, I’d like to highlight breakouts of the past couple weeks as well as list the top 10 breakout opportunities right now in the market.   However, I’d like to caution that now is the time to be fairly conservative.  We’ve had a tremendous run over the past couple weeks. 

As always, click here to a larger screenshot of the database, filtered to show the top breakouts (total fundamental + technical score of 50/60 or above) of the past 2 weeks. 

Running through the breakouts and scanning through the several hundred stocks that I track, I’ve been noticing that commodities (specifically oil) have been doing particularily well of late.  In fact, nearly half of the top 15 breakouts of the past 2 weeks come from the oil and metals groups.  Let’s have a look.

It’s been a bit of a mixed bag in terms of breakout success over the past 2 weeks – 39 breakouts, 14 with a gain, 9 with a loss and 6 with no gain.  The biggest winners include Core Molding Technologies (CMT) with a 12% gain (a stock highlighted in a report to free and premium members of SelfInvestors.com), OraSure Technologies (OSUR) with a 17% gain and The Pantry (PTRY), also with a 12% gain.  The biggest loser (although it remains above support with today’s reversal) was Miller Industries (MLR), down -6% from its breakout point.

Here’s my top ten list of stocks that have already broken out, but remain in a buyable range:

1) Allergan (AGN)

2) Joy Global (JOYG)

3) PetroChina (PTR)

4) Grant Prideco (GRP)

5) ChinaMobile (CHL)
6) Gildan Activewear (GIL)

7) CE Franklin (CFK)

8) Perficient (PRFT)

9) BHP Billiton (BHP)

10) Diamond Offshore Drilling (DO)

As always please do your own research.  These are ideas for further research.. Happy Trading and Good Luck!