Week 19 MDA Breakout Stocks - May 2022: Short-Term Picks To Give You An Edge

May 08, 2022 7:19 AM ETAAPL, CAT, CVX, DOW, ENPH, GNK, HP, IPI, KO, MCD, MRK, NR, PUMP, RES, TDW, TRIL, UNH, WMT2 Comments2 Likes

Summary

  • Two new Breakout Stocks for Week 19 with better than 10% short-term upside potential and two Dow 30 Picks. Average cumulative returns now up to +65.5% YTD.
  • High frequency breakouts continue despite Negative Momentum Gauge® signals with peak gains in 1 of 4 picks above 10%: WIRE +17.62%.
  • All the V&M Portfolios are beating the S&P 500 YTD led by the ETF portfolio +14.1%, Piotroski Value +7.8%, and Dividend Portfolio +1.7% YTD.
  • The streak of weekly picks gaining over 10% in less than a week of trading days increased to 211 out of 258 trading weeks (81.8%) not counting multiple gainers.
  • The MDA breakout picks continue to beat the S&P 500 into 6 consecutive years delivering a CAGR +49.8% and 726.0% compounding returns through 2021. 2021 returns were +70.5%.
  • This idea was discussed in more depth with members of my private investing community, Value & Momentum Breakouts. Learn More »

Desert Rainbow

James Griffiths Photography/iStock via Getty Images

Introduction

The Weekly Breakout Forecast continues my doctoral research analysis on MDA breakout selections over more than 7 years. This subset of the different portfolios I regularly analyze has now exceeded 250 weeks of public selections as part of this ongoing live forward-testing research. The frequency of 10%+ returns in a week is averaging over 4x the broad market averages over the past 5+ years.

In 2017, the sample size began with 12 stocks, then 8 stocks in 2018, and at members' request since 2020, I now generate only 4 selections each week. In addition 2 Dow 30 picks are provided, as well as a new active ETF portfolio that competes against a signal ETF model. Monthly Growth & Dividend MDA breakout stocks continue to beat the market each year as well. I offer 11 top models of short and long term value and momentum portfolios that have beaten the S&P 500 since my trading studies were made public:

The cumulative average breakout returns for 2022 is up to +65.5% not using the gauge signal. Officially, for trading safety, there has only been one full week of a positive momentum gauge signal in 2022 with the worst start to the stock market since the 1939.

In another quick study this year I found that despite record high negative momentum conditions, 59.7% of all the MDA selections this year are beating the S&P 500 YTD. This is nearly double the market average that by comparison has only 30.3% of all stocks on the 3 major exchanges beating the S&P 500 YTD. That comes down to 43 picks in 18 weeks are beating the S&P 500. 32 picks are beating the S&P 500 by over 10% and as high as 121.7% (RES), +83.4% (TDW), +33.9% (PUMP) and +45.1% (GNK) significantly beating the major indices YTD.

Breakout stock returns 2022

VM Breakouts.com

Additional background, measurements, and high frequency breakout records on the Weekly MDA Breakout model is here: Value And Momentum MDA Breakouts +70.5% In 52 Weeks: Final 2021 Year End Report Card

Returns from 21 Weeks of Positive Momentum Gauge signals in 2021

Last year there were only 21 positive trading weeks to achieve +70.5% returns. For 2022 the market has been even worse with only one official positive weekly signal in the past 24 weeks since the November topping signal.

Breakout stock returns 2021

VM Breakouts.com

Momentum Gauge® trading signal: Negative conditions ahead of Week 19

Weekly return measurements into the 2nd quarter of 2022.

Weekly breakout returns 2022

VMBreakouts.com

Red weekly color indicates negative Market Momentum Gauge signals. MDA breakout selections outperform when the market signal is positive and daily negative values are below 40 level.

Historical Performance Measurements

Historical MDA Breakout minimal buy/hold returns are at +70.5% YTD when trading only in the positive weeks consistent with the positive Momentum Gauges® signals. Remarkably, the frequency streak of 10% gainers within a 4- or 5-day trading week continues at highly statistically significant levels above 80% not counting frequent multiple 10%+ gainers in a single week.

Longer term many of these selections join the V&M Multibagger list now up to 105 weekly picks with over 100%+ gains, 44 picks over 200%+, 18 picks over 500%+ and 7 picks with over 1000%+ gains since January 2019 such as:

  • Intrepid Potash (IPI) +1,889.2%
  • Houghton Mifflin Harcourt Company (HMHC) +1,413.8%
  • Enphase Energy (ENPH) +1,099.5%
  • Trillium Therapeutics (TRIL) +1008.7%

More than 200 stocks have gained over 10% in a 5-day trading week since this MDA testing began in 2017. A frequency comparison chart is at the end of this article. Readers are cautioned that these are highly volatile stocks that may not be appropriate for achieving your long term investment goals: How to Achieve Optimal Asset Allocation

2022 Breakout Portfolio Returns

The Momentum Gauge® conditions continue with highly negative warning signals with only one full week of positive conditions in week 12 of 2022 with minimum returns of -1.0% following the signals and avoiding the 2nd worst quarter to start the year since the Global Financial Crisis.

The Breakout Picks are high volatility selections for high short-term gains, but with no selections below $2/share, under 100k average daily volume, or less than $100 million market cap. Prior returns are documented here:

2022 marks the worst start to the stock market since 2009 and the Momentum Gauge® MDA buy signals continue strongly negative ahead of next week. It is best to follow the signals and avoid momentum stocks until conditions turn positive.

MDA Breakout Stocks Annual Returns

VMBreakouts.com

Market Momentum Conditions

Why not avoid all the major market downturns?

The Market Momentum Gauges® based on 7,500+ stocks continue negative this week at Negative 123 and Positive 19. The negative value continues above 40 warning level of adverse market conditions through 2022.

Week 19 MDA Breakout Stocks

app.VMBreakouts.com

The Weekly Momentum Gauges® continue negative for 5 consecutive weeks with only three weeks positive in the past 24 weeks since November avoiding record market declines. The 2-year weekly chart below includes the 2020 Covid Correction.

Weekly Momentum Gauges

app.VMBreakouts.com

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 40 on the gauge.
  • Follow the Momentum Gauge® warning lights across the Market, S&P 500, and all 11 Sectors signals in a simple new feature below.

Week 19 MDA Breakout Stocks Momentum Gauge Warning Lights

VM Breakouts.com

The Week 19 - 2022 Breakout Stocks for next week are:

The picks for next week consist of 4 Energy sector stocks. These stocks are released to members in advance every Friday morning near the open. Prior selections may be doing well, but for research purposes I deliberately do not duplicate selections from the prior week. These selections are based on MDA characteristics from my research, including strong money flows, positive sentiment, and strong fundamentals -- but readers are cautioned to follow the Momentum Gauges® for the best results.

  1. Helmerich & Payne (HP) - Energy / Oil & Gas Drilling
  2. Newpark Resources (NR) - Energy / Oil & Gas Equipment & Services

Helmerich & Payne - Energy / Oil & Gas Drilling

HP Chart

FinViz

Price Target: $60.00/share (See my FAQ #20 on price targets)

May-06-22 04:15PM Helmerich & Payne, Inc. To Participate in Conferences in May 2022 Business Wire
May-05-22 12:00PM Helmerich & Payne (HP) is a Great Momentum Stock: Should You Buy? Zacks
May-05-22 09:03AM Helmerich & Payne (HP) Stock Surges 18.3% Since Q2 Earnings Top Zacks
May-04-22 09:35AM Helmerich & Payne (HP) Just Overtook the 20-Day Moving Average Zacks
May-03-22 05:08AM Zacks.com featured highlights Helmerich & Payne, Vaalco Energy and Diamondback Energy Zacks
Apr-28-22 04:41PM Drilling Rig Prices Are Spiking in the U.S. Shale Patch Bloomberg

(Source: FinViz)

Helmerich & Payne, Inc., together with its subsidiaries, provides drilling services and solutions for exploration and production companies. The company operates through three segments: North America Solutions, Offshore Gulf of Mexico, and International Solutions. The North America Solutions segment drills primarily in Colorado, Louisiana, Montana, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas, Utah, West Virginia, and Wyoming.

HP Stock chart

StockRover

Newpark Resources - Energy / Oil & Gas Equipment & Services

NR stock chart

FinViz

Price Target: $5.00/share (See my FAQ #20 on price targets)

May-03-22 04:15PM NEWPARK RESOURCES REPORTS FIRST QUARTER 2022 RESULTS PR Newswire
Apr-24-22 08:10AM Trade Alert: Bradley Radoff At Newpark Resources, Inc. (NR), Has Just Spent US$1.1m Buying 22% More Shares Simply Wall St.
Apr-05-22 04:15PM NEWPARK RESOURCES ANNOUNCES FIRST QUARTER 2022 EARNINGS RELEASE AND CONFERENCE CALL SCHEDULE PR Newswire
Apr-04-22 04:15PM NEWPARK RESOURCES ANNOUNCES RETIREMENT OF BOARD MEMBER PR Newswire

(Source: FinViz)

Newpark Resources, Inc. supplies products, as well as rentals and services primarily to the oil and natural gas exploration and production industry. The company operates through two segments, Fluids Systems and Industrial Solutions. The Fluids Systems segment provides drilling, completion, and stimulation fluids products and related technical services to customers primarily in the North America, Europe, the Middle East, and Africa, as well as certain countries in Asia Pacific and Latin America.

NR stock analysis

StockRover

Top Dow 30 Stocks to Watch for Week 19

First, be sure to follow the Momentum Gauges® when applying the same MDA breakout model parameters to only 30 stocks on the Dow Index. Second, these selections are made without regard to market cap or the below-average volatility typical of mega-cap stocks that may produce good results relative to other Dow 30 stocks.

While I don't expect Dow stocks to outperform typical breakout stocks over the measured five-day breakout period, it may provide some strong additional basis for investors to judge future momentum performance for mega-cap stocks in the short- to medium-term. The most recent picks of weekly Dow selections in pairs for the last 5 weeks:

Symbol Company Current % return from selection Week
(AAPL) Apple Inc. -0.23%
(MRK) Merck & Co. +0.49%
(WMT) Walmart -4.71%
DOW Dow Inc. -0.83%
(DOW) Dow Inc. +4.91%
(CAT) Caterpillar -3.08%
(CVX) Chevron Corporation +0.52%
(UNH) UnitedHealth Group -7.68%
(KO) Coca-Cola Company +3.97%
(MCD) McDonald's Corp +1.27%

If you are looking for a much broader selection of mega-cap breakout stocks beyond just 30 Dow stocks with more detailed analysis and strong returns I would recommend the Growth & Dividend MDA Breakout picks.

These selections are significantly outperforming major Hedge Funds and all the hedge fund averages since inception. Consider the actively managed ARK Innovation fund down -51.76% YTD.

These picks are released monthly for long term total return with strong returns that are leading the S&P 500 by +15.2% through 2022. The March/May selections are heavy in energy up +6.8% and the new April picks are heavy in undervalued financial stocks for long term gains. All the major market indices remain negative YTD and the 2-year returns of monthly portfolios are also shown below not including returns from large dividends over +2% for each stock:

Week 19 MDA Breakout Stocks Growth & Dividend returns 1 year

VM Breakouts.com

Week 19 MDA Breakout Stocks Growth & Dividend picks 2 years

VM Breakouts

The Dow picks for next week are:

Chevron Corp (CVX)

Chevron is back again in strong breakout conditions following excellent earnings results on April 29th. While inflows are still down other indicators are showing improving investor sentiment toward breakout conditions above key resistance at 170/share. The price reflects a strong correlation with Crude Oil back above $110/bbl this week as in March and April.

CVX stock chart

FinViz

Background on Momentum Breakout Stocks

As I have documented before from my research over the years, these MDA breakout picks were designed as high frequency gainers.

These documented high frequency gains in less than a week continue into 2020 at rates more than four times higher than the average stock market returns against comparable stocks with a minimum $2/share and $100 million market cap. The enhanced gains from further MDA research in 2020 are both larger and more frequent than in previous years in every category. ~ The 2020 MDA Breakout Report Card

The frequency percentages remain very similar to returns documented here on Seeking Alpha since 2017 and at rates that greatly exceed the gains of market returns by 2x and as much as 5x in the case of 5% gains.

MDA Frequency Breakout Charts

VMBreakouts.com

The 2021 and 2020 breakout percentages with 4 stocks selected each week.

Frequency Breakout charts 2021 2020 MDA picks

VMBreakouts.com

MDA selections are restricted to stocks above $2/share, $100M market cap, and greater than 100k avg daily volume. Penny stocks well below these minimum levels have been shown to benefit greatly from the model but introduce much more risk and may be distorted by inflows from readers selecting the same micro-cap stocks.

Conclusion

These stocks continue the live forward-testing of the breakout selection algorithms from my doctoral research with continuous enhancements over prior years. These Weekly Breakout picks consist of the shortest duration picks of seven quantitative models I publish from top financial research that also include one-year buy/hold value stocks. Remember to follow the Momentum Gauges® in your investing decisions for the best results.

All the V&M portfolio models are beating the market indices in the worst downturn since 1939 for the S&P 500. The new active ETF portfolio is up +14.06% YTD beating the S&P 500 by over 27.5% and value portfolios of Piotroski-Graham picks are up +7.7% through one of the worst starts in stock market history. The Top ETF returns following the Momentum Gauge® signal from the April 21 negative daily signal are over +33%

VM Breakout portfolio returns 2022 YTD

VMBreakouts.com

The final 2021 returns for the different portfolio models from January of last year are shown below.

VM Breakouts portfolio returns 2021

VMBreakouts.com

All the very best to you, stay safe and healthy and have a great week of trading!

JD Henning, PhD, MBA, CFE, CAMS



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, join our 1,200+ outstanding members at Value & Momentum Breakouts

  • Subscribe now and learn why members are hooked on the Momentum Gauge® signals!
  • For the 5th year in a row 6 different portfolio models beat the S&P 500!
  • The MDA Breakouts gained 70.5% with 5 year +47.98% CAGR
  • Now into our 6th year, this rapidly growing service has consistently outperformed the S&P 500 every single year!


See what members are saying now - Click HERE

This article was written by

JD Henning profile picture
16.97K Followers
Revealing the best financial models with consistent double digit success

Welcome! I am 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. I'm the founder of Value & Momentum Breakouts.

***

I'm JD Henning, the founder of Value & Momentum Breakouts. I've spent decades studying how to get better returns in the market. I've earned degrees researching markets, and even more importantly, I've spent the time myself as a trader and investor.  I am one of those unusual multi-millionaire, PhD's in finance, former Coast Guard officer with a bunch of certifications ranging from anti-money laundering specialist, investment adviser, to fraud examiner...  who genuinely enjoys helping others do well in the markets.  I'm bringing the fruits of my experience and research to this service.  I am highly accessible to members to answer questions and give guidance.  

***


It's been quite the start of the year for investors. My guess is, after a decade of good times in the market, you’re here looking for some guidance in how to navigate these volatile markets and the uncertainty of the coronavirus and inflationary conditions. You’re in the right place. For the past 5 years I’ve made my trading systems public and helped hundreds of my subscribers navigate and profit from every market downturn and breakout - including the coronavirus crash last year.



***

Value & Momentum Breakouts doesn't stop with the Momentum Gauges® and the Bull/Bear ETF strategy. The service is designed for investors who appreciate having easy access to quick picks from many top quantitative financial models across different types of investing strategies.  Portfolios and selections cover all types of investments:

***

Commodity and Volatility fund trading

Cryptocurrency chart analysis

Long term high-dividend growth stocks

Short term high-frequency breakout stocks

Forensic analysis value stocks

Value enhanced long term growth picks

ETF sector and bull/bear combination trades

Dow mega cap breakout picks

Sector and Index Momentum Gauges® for market timing

***

I share my expertise by generating frequent Value & Momentum Breakout stock portfolios from the different financial algorithms across peer-reviewed financial literature. The best selection of stocks from these algorithms are applied to the Premium Portfolio, beating the S&P 500 for the 3rd straight year in a row with average annual gains of 32.98% through 2020.

***

Try a 2-Week FREE trial and see all the value for yourself.



Follow

Disclosure: I/we have a beneficial long position in the shares of KOLD either through stock ownership, options, or other derivatives. 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.

Additional disclosure: I continue to follow the Market Momentum Gauge® and Sector Momentum Gauge® signals. I adjust my exposure ahead of weekends and holidays to minimize the risk from these high volatility 3x funds that may not be appropriate investments for your portfolio. Readers are highly encouraged to consider your own optimal asset allocation strategies to diversify risks and enhance returns. I have maintained much higher cash positions this year with the Weekly Gauges negative 21 out of the last 24 weeks from the November topping signal.

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.