Week 14 Breakout Forecast: Short-Term Picks To Give You An Edge

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Includes: ACHN, ARWR, CCXI, CERS, CLSD, CPRX, ERII, FBIO, GPRK, HBIO, KDMN, KGC, NTEC, OMED, ONDK, SBBP, UTI, VCEL, VSLR
by: JD Henning

Summary

Publishing two of the 8 new Week 14 breakout stocks that are available only to subscribers with better than 10% short-term upside potential.

Performance results for both 1-week and 2-week holding periods are significantly outperforming S&P 500 YTD with 1-week YTD +26.21% and the 2-week holding period +18.55% YTD.

Top Gainers thru Week 13: KGC +2.33% / Week 12: GPRK +21.45% SBBP +10.63% / Week 11: KDMN +1.67% / Week 10: CLSD +38.27% CCXI +28.30% CERS +21.52% / Week.

Last week the Momentum Gauge was near record levels of low positive momentum (13) and high negative momentum (73): No stocks gained over 10%.

Continuing from last year now makes it 45 out of 53 trading weeks (84.90%) with at least one stock move 10% or greater within a 4 or 5 day trading week.

Breakout Forecast Selections for Week 14:

Market conditions continue with extreme volatility. The Market Momentum Gauge indicators are now a subscription based forecasting feature to help gauge the expected momentum conditions for the week ahead. The total return of the Breakout Stock selections since the January 2017 formation is shown on the chart below:

Total Return Chart: +67.40%

This week I have selected 8 breakout stocks for subscribers from the following sectors: 5 healthcare, 1 technology, 1 consumer goods, and 1 financial.

The two new selections of positive momentum stocks for this week include:

  1. OncoMed Pharmaceuticals (OMED) - Healthcare / Biotechnology
  2. On Deck Capital (ONDK) - Financial / Credit Services

These stocks are not necessarily recommended for long term buy/hold unless you are comfortable with very large price swings. As I continue to observe, strong momentum events usually last from one to three weeks and may encounter some substantial decline before returning again to positive gains.

These are the most volatile selections I offer from among all the different Value & Momentum portfolios. Proposed entry points for each of the selected stocks are as close to the highlighted prices in yellow on the charts at market open. All stocks are selected for high short-term breakout results over one to three weeks.

Breakout Stock Charts for Week 14

Note: all breakout stocks are selected based on my algorithm to increase the frequency of 10% gains within a short period of time. Price targets are estimated through an unrelated technical charting process for those who are looking for estimated exit points, however it is possible the momentum in these selections may move well beyond the initial target.

Pick #1: OncoMed Pharmaceuticals (OMED) - Healthcare / Biotechnology

Price Target: 4.50

OMED has strong technical parameters for breakout selection this week with increasing RSI, money flow, and other key indicators. The current cup and handle pattern combined with strong momentum and fundamental characteristics looks strong enough for a move above 3.50 and another move into the price channel to 4.50.

Mar-27-18 12:01PM Can The Uptrend Continue for OncoMed Pharmaceuticals (OMED)? Zacks
Mar-19-18 08:32AM OncoMed Announces Appointment of John Lewicki, PhD, as President, Chief Executive Officer and a member of the Board of Directors GlobeNewswire
Mar-16-18 12:22PM OncoMed Pharmaceuticals Inc (NASDAQ:OMED): What Are The Future Prospects? Simply Wall St.
Mar-14-18 02:58PM Catalyst Pharmaceuticals Inc (NASDAQ:CPRX) and Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) Among Five Cheap Healthcare Stocks To Buy Now Insider Monkey

OncoMed Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on discovering and developing novel therapeutics that address the fundamental biology driving cancer's growth, resistance, recurrence, and metastasis. The company's product candidates and preclinical programs include navicixizumab (anti-DLL4/VEGF Bispecific, OMP-305B83), a monoclonal antibody that targets Delta-like ligand 4 and vascular endothelial growth factor, which has completed a single-agent Phase Ia clinical trial in patients with advanced solid tumors, as well as in two Phase Ib clinical trials for patients with platinum-resistant ovarian cancer and metastatic colorectal cancer; anti-TIGIT (OMP-313M32), a T-cell immunoreceptor with immunoglobulin and ITIM domain, which is in Phase Ia clinical trial for patients with advanced or metastatic solid tumors; GITRL-Fc (OMP-336B11), a glucocorticoid-induced tumor necrosis factor receptor -related protein and its ligand, which is in Phase Ia clinical trial for patients with advanced or metastatic solid tumors; and rosmantuzumab (anti-RSPO3, OMP-131R10), a monoclonal antibody targeting the RSPO-LGR CSC pathway.

Pick #2: On Deck Capital (ONDK) - Financial / Credit Services Price Target: 6.50

ONDK has strong technical parameters for breakout selection this week with increasing RSI, money flow, and other key indicators. Positive price movement appears strong enough to reach and retest prior resistance levels of 6.50 and possibly move higher into the next price channel between 6.50 and 8.50.

Mar-20-18 09:02AM On Deck Capital Inc (NYSE:ONDK): Is Breakeven Near? Simply Wall St.
Mar-20-18 07:55AM Consolidated Research: 2018 Summary Expectations for Archrock, Milacron, On Deck Capital, CyberOptics, Verint, and International Seaways Fundamental Analysis, Key Performance Indications GlobeNewswire
Mar-16-18 07:00AM OnDeck Names Diamond Janitorial Services as Small Business Of the Month PR Newswire
Mar-12-18 06:00PM OnDeck Announces Chief Financial Officer Transition PR Newswire

On Deck Capital, Inc. operates an online platform for small business lending in the United States, Canada, and Australia. It offers term loans and lines of credit.

Breakout Forecast Performance Results:

Total Breakout portfolio returns by week for the past 5 weeks are listed below through the end of last week to illustrate the rolling returns of prior top performers and total portfolio returns:

Breakout Forecast Portfolio gains past 5 weeks / Top 3 Performing Stocks
Week 13 +0.12% / (KGC) +2.33% (UTI) +2.08% (HBIO) +2.04%
Week 12 -1.33% / (GPRK) +21.45% (SBBP) +10.63% (VSLR) +7.35%
Week 11 -9.90% / (KDMN) +1.67% (NTEC) +0.40% (ERII) -3.52%
Week 10 +10.11% / (CLSD) +38.27% (CCXI) +28.30% (CERS) +21.51%
Week 9 +7.86% / (VCEL) +36.30% (ARWR) +24.31% (FBIO) +12.90%

For those who are new to this short-term selection method, I would highly recommend that you review the end of year performance summary and the links to methodology articles about how these high volatility, typical low cap, breakout selections work. This approach tries to maximize the frequency of substantial positive returns using the parameters that resulted from my published doctoral research by focusing on the most volatile sector of stocks.

2018 YTD Chart: +26.21%
Cumulative return with 1-week holding period.



2-Week Holding Period Returns

The next charts shows the cumulative return for a longer fixed 2-week holding period instead of the 1 week holding period charted above. Because 2-week holding periods overlap with weekly selections, I have separated it into two charts, Odd and Even weeks:

  1. Using 2-week holding periods, the ODD Weekly Breakout portfolios have returned +20.73% compared to -0.30% for the S&P 500 YTD over the same holding periods.
  2. The EVEN Weekly Breakout portfolios have returned +18.55% compared to -4.89% of the S&P 500 in the equivalent 2-week holding period.

Chart 1. Odd 2-Week Holding Chart 2. Even 2-Week Holding

Please click the "Follow" button at the top of the page and enjoy free updates on the progress of each of the different portfolios I offer that are outperforming the S&P 500 in each of their respective time periods.

As always, I wish you the very best in all your investments!

JD Henning, PhD, MBA, CFE, CAMS

Disclosure: I am/we are long PRK, VSLR, KDMN, CLSD, CCXI, VCEL, FBIO, ARWR, RUN.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.