Breakout Stock Portfolio 2019 results YTD
Cumulative Weekly Max Gain YTD: +61.60%
Cumulative Gain by Friday of the Week: -3.60%
This week 3 out of 4 breakout stocks for members reached double digits during a short trading week. Selling of the breakout stocks prior to the end of the fixed 4- or 5-day holding measurement period remains the most profitable 1-week strategy. Also, as I monitor results for optimal holding periods over multiple weeks on the breakout stock spreadsheet for members, I am seeing that the two-week hold through the following Thursday is currently generating the best overall results as positive momentum conditions carry well into second and third weeks.
(Source: Value & Momentum Breakouts)
The evidence is strong that you can outperform the fixed 1-week, equal weighted minimum return measurement shown above in the 1-week close (blue line). Selling many of the selections prior to Friday has resulted in +61.60% return YTD (green line) compared to the S&P 500 +11.51% for the same period.
As the returns for the past 8 selections for 2019 show, so far, the best returns were generally achieved in fewer than four days with an average top gain of 9.26% per stock. Idiosyncratic events will occur that the model cannot anticipate (e.g. earnings surprise, CEO resignation, SEC investigation, etc.), so it is always a good strategy to hold a basket of stocks to diversify unpredictable risks.
(Source: Value & Momentum Breakouts)
Momentum conditions remain strongest among AcelRx Pharmaceuticals (ACRX), Earthstone Energy (ESTE), PPDAI Group (PPDF), Insys Therapeutics (INSY), CymBay Therapeutics (CBAY), Cara Therapeutics (CARA), Patterson-UTI Energy (PTEN), Marinus Pharmaceuticals (MRNS), Aqua Metals (AQMS), TechTarget (TTGT), FormFactor (FORM), Keane Group (FRAC), eXp World Holdings (OTC:EXPI), Barnes & Noble Education (BNED) and Daseke (DSKE) from prior week breakout selections.
Momentum parameters have moved highly positive from Week 8 Breakout Selections. For Week 9, the four breakout selections took off on Friday before the market close for members who jumped in early with exclusive advance notice.
The current Momentum values remain in very positive levels for the 6th week in a row above 100, now at 135 Positive and 6 Negative. These are some of the highest positive momentum levels we have seen on this gauge in over a year. (Source: Value & Momentum Breakouts Dashboard)
Using the signals of the Momentum Gauge may significantly improve your returns in 2019. Two conditional signals that are very important to watch:
- Avoid/Minimize trading when the Negative score is higher than the Positive momentum score.
- Avoid/Minimize trading when the Negative score is above 70 on the gauge.
The Week 9 - 2019 Breakout Stocks for next week are:
The four breakout stocks to start the week consist of 2 healthcare and 2 technology stocks.
- Akebia Therapeutics (AKBA) - Healthcare / Biotechnology
- Qudian Inc. (QD) - Technology / Information Technology Services
Akebia Therapeutics - Healthcare / Biotechnology
Price Target: $9.00
|Feb-19-19 07:18 AM||Akebia Therapeutics, Inc. Is Trading At A 29.34% Discount Simply Wall St.|
|Feb-14-19 05:09 PM||Seth Klarman Discloses 4th-Quarter Stock Purchases GuruFocus.com|
|Feb-04-19 04:05 PM||Akebia Therapeutics Reports Inducement Grants Under Nasdaq Listing Rule 5635((C))(4) Business Wire|
Akebia Therapeutics, Inc., a biopharmaceutical company, focuses on the development and commercialization of novel therapeutics for patients with renal disease through hypoxia-inducible factor (HIF) biology. Its lead product candidate is vadadustat, an oral therapy, which is in Phase III development for the treatment of anemia due to chronic kidney disease in dialysis and non-dialysis patients.
Qudian Inc. - Technology / Information Technology Services
Price Target: $7.00
|Jan-31-19 01:03 PM||Does Qudian Inc. Have A Good P/E Ratio? Simply Wall St.|
Qudian Inc. provides online small consumer credit products in the People's Republic of China. It uses big data-enabled technologies, including artificial intelligence and machine learning to transform the consumer finance experience. The company offers cash credit products, such as cash short-term unsecured lines of credit, which are distributed in digital form, and merchandise credit products to finance borrowers' direct purchase of merchandise offered on its marketplace on installment basis, as well as budget auto financing products.
Caution: These stocks are not necessarily recommended for long-term buy/hold unless you are comfortable with very large price swings. These are the most volatile selections I offer from among all the different Value & Momentum portfolios. Entry price points are highlighted in yellow as a general point of entry as market conditions allow in the next trading session. Members of my service receive these selections prior to the close on Friday.
Top 2 Dow 30 Stocks to Watch for Week 9
Applying the same breakout model parameters without regard to market cap or the below average volatility of mega-cap stocks may produce similar strong results relative to other Dow 30 stocks.
While I don't expect Dow stocks to outperform typical breakout stocks over the measured 5-day breakout period, it can provide some strong additional basis for investors to judge future momentum performance for mega-cap stocks in the short to medium term. The top 2 stocks based on the same published breakout parameters for this week are:
Microsoft Corporation (MSFT)
Heading toward a new 52-week high above $115/share with indicators showing strong momentum to break $112/share key resistance to October.
Pfizer Inc. (PFE)
Breaking above a negative price channel on strong earnings and positive technical indicators. Headed to $48/share to new 52-week high on strong earnings and top of the positive price channel.
All of these key weekly and monthly selections feed into the Premium Portfolio database selection model portfolio that is now up 22.34% YTD with 22 stocks gaining more than 10% and as much as 66.21% since January.
All the very best to you and have a great week of trading!
JD Henning, PhD, MBA, CFE, CAMS
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in AKBA, QD, MSFT, PFE over the next 72 hours. 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.