MDA Breakout Stocks Week 47 - Short-Term Picks To Give You An Edge

Summary

  • Two new Breakout Stocks for Week 47 with better than 10% short-term upside potential and one Dow 30 Pick. Average cumulative returns now up to +123.7% YTD.
  • This week 2 of 4 picks gained 10%+ in less than a week with FUTU +23.6% and FREY 14.0% of the high frequency breakout movers. VIPS peaked at +9.64%.
  • The streak of weekly picks gaining over 10% in less than a week of trading days increased to 231 out of 287 trading weeks (80.5%) not counting multiple gainers.
  • All the V&M Portfolios are beating the S&P 500 YTD: Bounce/Lag +44.9%, Piotroski-Graham +13.7%, Neg Forensic +13.4%, Active ETF +6.21% YTD.
  • 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%.
  • Looking for more investing ideas like this one? Get them exclusively at Value & Momentum Breakouts. Learn More »

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Introduction

The Weekly Breakout Forecast continues my doctoral research analysis on MDA breakout selections over more than 7 years. This high frequency breakout subset of the different portfolios I regularly analyze has now exceeded 280 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 studies were made public.

Market Outlook

The Momentum Gauges® continue positive in extremely high volatility for November after the largest Fed FOMC rate hike selloff ever followed by the CPI inflation rally reaction in the prior week. Many of the FANG mega cap stocks hit new 2022 year lows last week and Tesla (TSLA) hit new 2022 lows this week. More of these incredible charts are detailed here in my most recent article.

SPY weekly chart

FinViz.com VMBreakouts.com

We are still in a pattern of bearish rallies in a longer negative channel from November 2021. There are strong similarities to the volatility and patterns of 2018 and 2008 with investors very cautious. Follow the Momentum Gauges and be ready for more swift changes.

At around 4100, the S&P 500 will test the top of the negative channel in 2022 shown below. S&P 500 closed at 3,992 on Friday.

2008 / 2022 S&P 500 compared

yuriymatso

Morgan Stanley chief strategist says "buy-the-dip" but watch out for another pull back after the S&P 500 moves above 4100.

JPMorgan says don't buy here, you should be selling into S&P 500 above 3900. Additionally, JPMorgan revised their outlook this week from a bullish outlook to a base case of recession into 2023.

SPY daily chart

FinViz.com VMBreakouts.com

Momentum Gauges® Stoplight ahead of Week 47. The stock market and S&P 500 momentum gauges are positive from October and the weekly gauges continue positive for a 4th consecutive week. The sector gauges have turned neutral with sectors turning negative this week. Also the negative early test signal of 3 consecutive days of declining momentum was triggered on Friday and the early test model is in bear funds starting Monday.

Momentum Gauge Stoplight

VMBreakouts.com

Weekly Momentum Gauges continue positive for a 4th consecutive week but with declining positive momentum.

Weekly Momentum Gauge chart 2 years

app.VMBreakouts.com

S&P 500 Daily Momentum Gauges continue positive from October 21st with very high volatility.

S&P 500 Momentum Gauges

app.VMBreakouts.com

Current Returns

So far YTD 2022 there are 118 picks in 46 weeks beating the S&P 500. 99 picks are beating the S&P 500 by over 10%+ in double digits. Leading MDA gainers include (NUVL) +52.3%, (CLFD) +90.5%, (MNRL) +53.9%, (RES) +111.6%, (TDW) +158.0%, (ZYME) +43.7%, (VRDN) +75.1%, (ZYXI) +75.3%.

Despite such high negative momentum conditions all year, 48 picks in 46 weeks have gained at least 10% in less than a week. Additionally, 102 picks in 46 weeks have gained over 5% in less than a week in these high frequency breakout selections.

MDA Breakout returns YTD

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

These are highly significant statistical results that are further improved by following the Momentum Gauge signals with only 13 positive trading weeks this year. Worst case minimal returns following the MG trading signals are beating the S&P 500 YTD by +16.80%.

Leveraging The Momentum Gauges With ETFs

In addition to timing MDA breakout stock picks for the best returns, the gauges are used for live ETF bull/bear timing signals with strong results.

Momentum Gauge ETF spreadsheet

VMBreakouts.com

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 portfolio returns

VMBreakouts.com

Longer term many of these selections join the V&M Multibagger list now at 107 weekly picks with over 100%+ gains, 44 picks over 200%+, 20 picks over 500%+ and 12 picks with over 1000%+ gains since January 2019 such as:

  • Enphase Energy (ENPH) +2,155.5%
  • Celsius Holdings (CELH) +1,963.6%
  • Northern Oil and Gas (NOG) +1,265.5%
  • Trillium Therapeutics (TRIL) +1008.7%

More than 300 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 47 - 2022 Breakout Stocks for next week are:

The picks for next week consist of 1 Healthcare, 1 Industrial, 1 Technology, and 1 Consumer Cyclical sector stocks. These stocks are measured from release 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. AXT, Inc. (AXTI) - Technology / Semiconductor Equipment
  2. G-III Apparel Group (GIII) - Consumer Cyclical / Apparel Retail

AXT, Inc. - Technology / Semiconductor Equipment

AXTI chart

FinViz.com

Price Target: $6.50/share (See my FAQ #20 on price targets)

Oct-27-22 05:35PM AXT Beats Q3 Earnings Estimates Zacks
Oct-27-22 04:05PM AXT, Inc. Announces Third Quarter 2022 Financial Results GlobeNewswire
Oct-27-22 02:05PM 7 Penny Stocks That Could Turn $3 Into $30 (or More) by 2027 InvestorPlace
Oct-24-22 10:00AM Lattice Semiconductor Earnings Expected to Grow: What to Know Ahead of Next Week's Release Zacks
Oct-19-22 10:01AM Earnings Preview: AXT Q3 Earnings Expected to Decline Zacks
Oct-14-22 03:24PM 11 Best Micro-Cap Stocks To Invest In Insider Monkey

(Source: Company Resources)

AXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. It produces semiconductor substrates using its proprietary vertical gradient freeze technology. The company offers indium phosphide for use in data center connectivity using light/lasers, 5G communications, fiber optic lasers and detectors, passive optical networks, silicon photonics, photonic integrated circuits, terrestrial solar cells, RF amplifier and switching, infrared light-emitting diode motion control, lidar for robotics and autonomous vehicles, and infrared thermal imaging.

AXTI data report

StockRover.com

G-III Apparel Group - Consumer Cyclical / Apparel Retail

GIII chart

FinViz.com

Price Target: $25.00/share (See my FAQ #20 on price targets)

Nov-10-22 09:24AM G-III Apparel Group's Returns On Capital Are Heading Higher Simply Wall St.
Nov-08-22 11:40AM GIII vs. COLM: Which Stock Is the Better Value Option? Zacks
Nov-08-22 09:55AM Wall Street Analysts See a 43% Upside in G-III Apparel: Can the Stock Really Move This High? Zacks
Oct-07-22 11:30AM G-III Apparel Down 9.3% Since Last Earnings Report: Can It Rebound? Zacks
Oct-04-22 10:15AM G-III Apparel's Digital and Brand Strength Looks Good Zacks
Sep-20-22 04:35PM G-III Apparel Looks Good on Digital & Brand Strength Zacks
Sep-12-22 11:45AM The 7 Best Cheap Stocks to Buy Now InvestorPlace

(Source: Company Resources)

G-III Apparel Group, Ltd. designs, sources, and markets women's and men's apparel in the United States and internationally. The company operates through two segments, Wholesale Operations and Retail Operations. Its products include outerwear, dresses, sportswear, swimwear, women's suits, and women's performance wear; and women's handbags, footwear, small leather goods, cold weather accessories, and luggage.

GIII data report

StockRover.com

Top Dow 30 Stocks to Watch for Week 47

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
(CVX) Chevron Corp. -0.97%
DOW Dow Inc. -3.58%
(NKE) Nike Inc. +10.05%
(DOW) Dow Inc. +2.12%
CVX Chevron Corp. +0.30%
(INTC) Intel Corp. +5.07%
CVX Chevron Corp. +8.32%
TRV Travelers Companies +7.25%
(JPM) JPMorgan Chase +20.37%
(GS) Goldman Sachs Group +26.40%

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

Piotroski-Graham enhanced value -

  • July midyear at +6.16%
  • January portfolio beating S&P 500 by +40.46% YTD.

Positive Forensic -

  • July midyear down -9.20%
  • January Positive Forensic beating S&P 500 by +11.04% YTD.

Negative Forensic -

  • July midyear down -22.68%
  • January Negative Forensic beating S&P 500 by +30.15% YTD

Growth & Dividend Mega cap breakouts -

  • July midyear down -3.05%
  • January portfolio beating S&P 500 by +12.54% 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 -61.4% YTD, Tiger Global Management -58% YTD.

The Dow pick for next week is:

Visa (V)

Visa beat on earnings October 25th and is testing the top of the negative channel on the weekly char from November 2021. Analysts have upgraded in October and consensus price target is $249/share back to peak 2021 levels. US consumer credit levels are at the highest levels in decades with the highest interest rates since 2008.

Finviz 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.

MDA Frequency breakout charts

VMBreakouts.com

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

MDA breakout frequency charts 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 again leading the major indices to start the next long term buy/hold period.

Portfolio returns 2022 YTD

VMBreakouts.com

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

2021 Annual 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
17.3K 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.

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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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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.

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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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