MDA Breakout Stocks Week 38 - September 2022: Short-Term Picks To Give You An Edge

Summary

  • Two new Breakout Stocks for Week 38 with better than 10% short-term upside potential and a Dow 30 Pick. Average cumulative returns now down to +116.8% YTD.
  • This week two picks beat 10% gains in less than week with peak gains in BKKT +14.5% and CXM +12.5% with RIOT peaking at +8.5% before gauges turned sharply negative.
  • The streak of weekly picks gaining over 10% in less than a week of trading days increased to 224 out of 278 trading weeks (80.6%) not counting multiple gainers.
  • All the V&M Portfolios are beating the S&P 500 YTD. Plus new July midyear picks are also higher Piotroski-Graham +3.04%, Neg Forensic +30.2%, YTD Bounce/Lag +38.8%.
  • The MDA breakout picks continue to beat the S&P 500 into 6 consecutive years delivering a CAGR +31.8% and 718.1% compounding returns through 2022. In 2021 returns were +70.5%.
  • This idea was discussed in more depth with members of my private investing community, Value & Momentum Breakouts. Learn More »

Family running and splashing on the beach

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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 260 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 in 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 S&P 500 since my trading studies were made public.

Market Outlook

The Momentum Gauges®, economic events, and weekly market outlook are now separated into a weekly articles here which also includes my new weekly Technical Market update videos. Currently we are headed into the largest scheduled Fed quantitative tightening event for September in US history:

Momentum Gauges® Stoplight signals for Week 38 with all the gauges turning more negative ahead of Week 38 and the Fed FOMC rate decision Wednesday.

Momentum Gauge Stoplight signals

VMBreakouts.com

Current Returns

In a quick study of the MDA breakout selections YTD there are 100 picks in 37 weeks beating the S&P 500. 59 are picks beating the S&P 500 by over 10%+ in double digits. Leading MDA gainers include (CLFD) +48.9%, (RES) +64.9% (VRDN) +70.8%, (TDW) +100.5, (TA) +58.9%. Fully 115 weekly picks are beating the Nasdaq YTD that is down -26.8%.

2022 MDA breakout returns

VMBreakouts.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

2022 First-half weekly return results

First half returns with all weekly returns on the V&M Dashboard

Weekly MDA Breakout returns 1st half 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.

Annual MDA returns

VMBreakouts.com

Longer term many of these selections join the V&M Multibagger list now at 113 weekly picks with over 100%+ gains, 54 picks over 200%+, 18 picks over 500%+ and 11 picks with over 1000%+ gains since January 2019 such as:

  • Enphase Energy (ENPH) +2,119.4%
  • Celsius Holdings (CELH) +2,042.5%
  • Intrepid Potash (IPI) +1,111.4%
  • Northern Oil & Gas (NOG) +1079.4%
  • 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

The Week 38 - 2022 Breakout Stocks for next week are:

The picks for next week consist of 2 Healthcare, 1 Financial, and 1 Technology sector stocks. These stocks are released to members in advance every Friday morning near the open for the best gains. 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. NetScout Systems (NTCT) - Technology / Software - Infrastructure
  2. ProPhase Labs (PRPH) - Healthcare / Drug Manufacturers

NetScout Systems - Technology / Software - Infrastructure

NTCT chart

FinViz.com

Price Target: $38.00/share (See my FAQ #20 on price targets)

Sep-13-22 08:21AM NETSCOUTs Advanced Network Detection and Response Integrates with Palo Alto Networks Panorama for Enhanced Policy Enforcement of its ML-Powered Next Generation Firewalls Business Wire
Sep-13-22 03:36AM NetScout (NTCT) Moves 9.4% Higher: Will This Strength Last? Zacks
Sep-06-22 07:55AM NETSCOUT Provides End-to-End Visibility Across AWS Cloud WAN Environments with Aruba EdgeConnect Enterprise SD-WAN Platform Business Wire
Sep-02-22 10:46AM NetScout Systems (NASDAQ:NTCT) Might Have The Makings Of A Multi-Bagger Simply Wall St.
Aug-09-22 07:55AM NETSCOUT Arbor Insight Leverages Patented ASI Technology to Enhance Security and Operational Awareness for Network Operators of Any Scale Business Wire
Aug-06-22 10:10AM Despite shrinking by US$128m in the past week, NetScout Systems (NASDAQ:NTCT) shareholders are still up 51% over 3 years Simply Wall St.
Aug-04-22 11:30AM NetScout Systems (NTCT) Q1 2023 Earnings Call Transcript Motley Fool
Aug-04-22 09:05AM NetScout Systems (NTCT) Beats Q1 Earnings and Revenue Estimates Zacks

(Source: Company Resources)

NetScout Systems, Inc. provides service assurance and cybersecurity solutions for protect digital business services against disruptions in the United States, Europe, Asia, and internationally. The company offers nGeniusONE management software that enables customers to predict, preempt, and resolve network and service delivery problems, as well as facilitate the optimization and capacity planning of their network infrastructures; and specialized platforms and analytic modules that enable its customers to analyze and troubleshoot traffic in radio access and Wi-Fi networks.

NTCT Stock Rover data report

StockRover.com

ProPhase Labs - Healthcare / Drug Manufacturers

PRPH chart

FinViz.com

Price Target: $15.00/share (See my FAQ #20 on price targets)

Sep-08-22 09:40AM Are Medical Stocks Lagging ProPhase Labs (PRPH) This Year? Zacks
Sep-06-22 08:15AM ProPhase Labs to Present at the H.C. Wainwright 24th Annual Global Investment Conference September 12-14, 2022 (HYBRID CONFERENCE) GlobeNewswire
Aug-25-22 01:45PM 5 Cheap Healthcare Stocks in 2022 Zacks
Aug-25-22 12:00PM Here's Why ProPhase Labs, Inc. (PRPH) is a Great Momentum Stock to Buy Zacks
Aug-23-22 09:40AM Is DBV Technologies (DBVT) Stock Outpacing Its Medical Peers This Year? Zacks
Aug-11-22 09:25AM ProPhase Labs, Inc. (PRPH) Tops Q2 Earnings and Revenue Estimates Zacks

(Source: Company Resources)

ProPhase Labs, Inc. engages in the research, development, manufacture, distribution, marketing, and sale of over the counter (OTC) consumer healthcare products and dietary supplements in the United States. The company operates in two segments, Diagnostic Services and Consumer Products. (Source: StockRover)

PRPH Stock Rover report

StockRover.com

Top Dow 30 Stocks to Watch for Week 38

First, be sure to follow the Momentum Gauges® when applying the same MDA breakout model parameters to only 30 stocks on the Dow Index. Conditions have delivered the worst first half to the stock market since 1970. 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.

The most recent picks of weekly Dow selections in pairs for the last 5 weeks:

Symbol Company Current % return from selection Week
(MSFT) Microsoft Corp. -7.46%
(CAT) Caterpillar Inc. -5.29%
(AAPL) Apple, Inc. -5.35%
(CVX) Chevron Corp. -0.37%
(JPM) JPMorgan Chase & Co. +2.10%
(DOW) Dow Inc. -14.76%
MRK Merck & Co. -4.50%
(AMGN) Amgen, Inc. -7.73%
(MCD) McDonald's Corporation -2.21%
(MRK) Merck & Co. -2.11%

If you are looking for a much broader selection of large cap breakout stocks beyond the weekly stocks, I recommend these long term portfolios. The new mid-year selections were released to members to start July:

Piotroski-Graham enhanced value -

  • July up +3.04%
  • January portfolio beating S&P 500 by +25.98% YTD.

Positive Forensic -

  • July down -11.36%
  • January Positive Forensic beating S&P 500 by +2.73% YTD.

Negative Forensic -

  • July up +30.15%
  • January Negative Forensic beating S&P 500 by +22.12% YTD

Growth & Dividend Mega cap breakouts -

  • August up +1.89%
  • January portfolio beating S&P 500 by +8.62% YTD

These long term selections are significantly outperforming many major Hedge Funds and all the hedge fund averages since inception. Consider the actively managed ARK Innovation fund down -54.98% YTD, Tiger Global Management -52% YTD, RTW Investment Group -34% YTD.

The Dow pick for next week is:

Johnson & Johnson (JNJ)

Johnson & Johnson one of the few Dow 30 picks in breakout conditions above the long negative channel from June. Indicators all turning positive with high net MFI inflows with analyst consensus target around 187/share. Institutions are net buyers in the current quarter.

JNJ Chart

FinViz.com

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.

Frequency breakout tables MDA breakouts

VMBreakouts.com

(Value & Momentum Breakouts)

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

Frequency Breakout Tables 2020 / 2021

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 through the worst 6 month start since 1970. New mid-year value portfolios are up sharply to start the next long term buy/hold period.

VM Breakout portfolio returns YTD 2022

VMBreakouts.com

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

2021 VMBreakout portfolio returns

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



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This article was written by

JD Henning profile picture
17.14K Followers
Revealing the best financial models targeting 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.  

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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.



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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:

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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within 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.

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 been mostly in cash this year with many weeks of negative Momentum Gauge signals.

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