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Week 10 MDA Breakout Forecast: Short-Term Picks To Give You An Edge



  • One sample Breakout Stocks for Week 10 with better-than-10% short-term upside potential and one sample Dow stock.
  • The MDA Breakout portfolio is up +41.50% YTD compared to the SP 500 -8.56% YTD in the first 9 weeks of 2020.
  • This Week 9: the portfolio gained an average +5.39% led by gains in LAKE +61.39% to the close.
  • The streak of weekly selections gaining over 10% in less than 4 or 5 trading days continues to 120 out of 146 trading weeks (82.19%).
  • The Momentum Gauges closed Friday after-hours at Negative 113 and Positive 9 after turning negative Monday. Use caution as MDA breakout selections may be impacted by severely negative markets.
  • This idea was discussed in more depth with members of my private investing community, Value & Momentum Breakouts. Get started today »


The Weekly Breakout Forecast continues my doctoral research analysis on MDA breakout selections over more than 5 years. This subset of the different portfolios I regularly analyze has now reached 146 weeks of public selections as part of this ongoing live forward-testing.

In 2017, the sample size began with 12 stocks, then 8 stocks in 2018, and at members' request into 2020, I now generate 4 selections each week, 2 Dow 30 picks, and a separate article for Growth & Dividend MDA breakout stocks. I now provide 6 different ways to beat the S&P 500 since my trading studies were made public. I have no idea how long I will continue to offer this service.

Remarkably, the frequency streak of 10% gainers within a 4- or 5-day trading week remains at highly statistically significant levels above 80% not counting frequent multiple 10% gainers in a single week. More than 200 stocks have gained over 10% in a 5-day trading week since this MDA testing began in 2017.

2020 YTD Breakout Portfolio Returns

The Breakout Picks are up +41.50% worst case, buy/hold, do nothing, equal weighted returns through Week 9 compared to the S&P 500 -8.56% over the same period. The Best case average weekly returns are +12.56% and worst case 4.61% YTD as shown below. These returns include trading during the Negative Momentum Gauge signal weeks which increases risk of declines. Week 9 closed with average gains of +5.39% compared to -12.98% for the S&P 500.

(Source: Value & Momentum Breakouts)

These breakout picks skew highly positive for high frequency short-term gains in less than 5 days as documented over the past 3 years. I will be removing the best case (High YTD) gains from the chart below next week as it begins to distort the chart between the worst case (Low YTD) gains

If you are looking for a great community to apply proven financial models with picks ranging from short term breakouts to long term value and forensic selections, please consider joining our 500+ outstanding members at Value & Momentum Breakouts

  • Subscribe now and learn many new models and techniques for short and long term trading success.
  • Members receive active trading alerts and live stock picks well ahead of published articles.
  • Now into our 4th year, this rapidly growing service has consistently outperformed the S&P 500 every single year!

    See what members are saying now -a href="https://seekingalpha.com/checkout?service_id=mp_1201"Click HERE/a/strongbrbr/li/ulp/p!--EndFragment--

This article was written by

JD Henning profile picture

JD Henning is a Finance PhD, MBA, investment adviser, fraud examiner and certified anti-money laundering specialist with more than 30 years trading and investing stocks and other securities. JD runs Value & Momentum Breakouts where he identifies identify breakout signals and breakdown warnings using technical and fundamental analysis.

Signals from his proprietary Momentum Gauges® not only alert subscribers of market changes, but the strength of markets for short term breakouts or breakdown warnings across 11 different sectors. Top stock and ETF selections use technical and fundamental systems in proven financial studies. Value & Momentum Breakouts is the place to build your own optimal portfolio mix with a community of like-minded investors and traders. Features include a Premium Portfolio, bull/bear ETF strategy, morning updates and an active chat room. Learn more.

Analyst’s Disclosure: I am/we are long FNGD, ERY. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (7)

Hi JD,

Just subscribed, have been reading some of your articles in the past. Is LRN the only stock pick for the week? Out of curiosity, does your model looking at the current price relative to historical ranges such as the past 3-months, 6 months, etc? Or do you primarily use technical indicators like RSI, Bollinger Bands, and volume levels?

Keep up the great stuff!

JD Henning profile picture
@axg5068 Welcome! I'll talk to you in the members' area and I hope you benefit greatly!
Thanks JD

Saw you gave LRN this week. Do you usually keep your short term plays for a week or so? What is your typical sell signal, or I guess what do you rely on more. Percent drop, or are you confident enough in your picks to wait out a 5-8 percent drop before selling?
JD Henning profile picture
@yarf01 Thanks for your question.

1) I measure all the results posted in the articles each week based on "worst case, buy/hold, do nothing, equal weighted returns" through the close on Friday.

2) It is possible to beat my published returns by reacting to news, events, earnings reports and other changes during the week prior to my fixed measurement period.

3) Members receive live updates and answers to technical conditions based on the MDA momentum parameter changes for timing the best exit decisions.

I rely most on conditional monitoring for the best results, but the fixed returns are the measured results. I offer free presentations and video on timing the exits with a two-week free-trial as well as live chat for update and analysis of any stock.
Have you ever seen the momentum gauge switch from positive to negative then back to positive then collapse to negative in such a short period of time?
JD Henning profile picture
The signal changes since the end of January 2020 are the most frequent I have seen in over 2 years. 3 signal changes on the Weekly charts and 5 changes on the Daily charts.

This also corresponds to a period where the PBOC injected the most stimulus in a single week in February that it has ever done in over 12 years to prop up China markets. The Fed has eased over $260 billion in less than 18 weeks. It gives the me the sense that the market would correct if the central banks would pause or stop their stimulus efforts. Today we hear the Bank of England and Bank of Japan will also look to stabilize markets with more stimulus soon.
JD Henning profile picture
First of the 4 MDA breakout picks for members up +10.45% through Monday.

3M up +2.4% this morning.
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