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 3rd 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.