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The Weekly Breakout Forecast continues my doctoral research analysis on MDA breakout alternatives over greater than 7 years. This excessive frequency breakout subset of the totally different portfolios I usually analyze has now reached 290 weeks of public alternatives as a part of this ongoing reside forward-testing analysis. The frequency of 10%+ returns in per week is averaging over 4x the broad market averages previously 5+ years.

In 2017, the pattern dimension started with 12 shares, then 8 shares in 2018, and at members’ request since 2020, I now generate solely 4 alternatives every week. As well as 2 Dow 30 picks are offered, in addition to a brand new energetic ETF portfolio that competes towards a sign ETF mannequin. Month-to-month Development & Dividend MDA breakout shares proceed to beat the market annually as nicely. I supply 11 prime fashions of quick and long-term worth and momentum portfolios which have overwhelmed the S&P 500 since my buying and selling studies were made public.

Market Outlook

The Market and S&P 500 Momentum Gauges® have each turned damaging together with the Weekly Market Gauges after the longest optimistic sign for the reason that November 2021 topping sign. Financial information stays weak and indicators present early strikes within the subsequent leg decrease with rising QT exercise. Extra of those incredible charts are detailed right here and within the chat rooms. A retest of 3900 key assist on the S&P 500 (SPY) may be very possible again to November seventeenth lows.

SPY chart

I’ve been anticipating the S&P 500 market sample to comply with with one other leg decrease as proven above. The timing is in keeping with the VIX reaching the bottom ranges for the reason that April and August market peaks. As I’ve stated for weeks, the market reversal may coincide with the following FOMC assembly and charge hike resolution on December thirteenth.

VIX chart

We’re nonetheless in a sample of bearish rallies in an extended damaging channel from November 2021. There are sturdy similarities to the volatility and patterns of 2018 and 2008 with buyers very cautious. Observe the Momentum Gauges and be prepared for extra swift adjustments.

Morgan Stanley chief strategist says the bear rally has ended and the following leg decrease has begun: “The Perfect Bull Trap”: Mike Wilson Turns Bearish Again, Says The Rally Is Over

JPMorgan says do not buy right here, you have to be promoting into S&P 500 above 3900. “We See More Selling Into Strength Here”: Why JPM’s Trading Desk Isn’t Buying This Rally

JPMorgan has modified from a bullish outlook to a base case of recession into 2023: JPM Makes 2023 Recession Its Base Case, Expects Million Jobs Lost By Mid-2024

Momentum Gauges® Stoplight forward of Week 50. The Inventory Market and S&P 500 momentum gauges and weekly gauges are damaging ending the longest optimistic sign for 2022. The sector gauges have turned extra damaging with solely fundamental supplies optimistic on the defensive gold/silver commerce.

Momentum Gauge Stoplight signals

The primary stage of weekly and month-to-month sector gauges have been launched on the automated Momentum Gauge web site to the general public!

Weekly Momentum Gauges have turned damaging after the longest optimistic sign for 2022 of 6 consecutive weeks. Detrimental momentum has been rising for the previous 3 weeks.

Weekly Momentum Gauges

S&P 500 Every day Momentum Gauges have ended the longest optimistic sign for 2022 with damaging momentum spiking sharply greater to start out December.

S&P 500 Momentum Gauges

Present Returns

To date YTD 2022 there are 120 picks in 49 weeks beating the S&P 500. 96 picks are beating the S&P 500 by over 10%+ in double digits. Main MDA gainers embody (NUVL) +53.1%, (CLFD) +66.6%, (FUTU) 52.7%, (MNRL) +43.5%, (RES) +73.7%, (TDW) +150.2%, (ZYME) +43.7%, (VRDN) +110.0%, (ZYXI) +68.9%.

Regardless of such excessive damaging momentum circumstances all 12 months, 52 picks in 49 weeks have gained no less than 9.9% in lower than per week. Moreover, 110 picks in 49 weeks have gained over 5% in lower than per week in these excessive frequency breakout alternatives, regardless of many shortened vacation weeks.

MDA breakout returns YTD

Further background, measurements, and excessive frequency breakout data on the Weekly MDA Breakout mannequin is right here: Value And Momentum MDA Breakouts +70.5% In 52 Weeks: Final 2021 Year End Report Card

These are extremely important statistical outcomes which are additional improved by following the Momentum Gauge alerts with solely 14 optimistic buying and selling weeks this 12 months. Worst case minimal returns following the MG buying and selling alerts are beating the S&P 500 YTD by +14.5%.

Leveraging The Momentum Gauges With ETFs

Along with timing MDA breakout inventory picks for the perfect returns, the gauges are used for reside ETF bull/bear timing alerts with sturdy outcomes.

ETF Combo Returns

Historic Efficiency Measurements

Historic MDA Breakout minimal purchase/maintain returns are at +70.5% YTD when buying and selling solely within the optimistic weeks in keeping with the optimistic Momentum Gauges® alerts. Remarkably, the frequency streak of 10% gainers inside a 4- or 5-day buying and selling week continues at extremely statistically important ranges above 80% not counting frequent a number of 10%+ gainers in a single week.

Annual MDA Breakout returns

V&M Multibagger Checklist

Long run many of those alternatives be part of the V&M Multibagger listing now at 111 weekly picks with over 100%+ good points, 53 picks over 200%+, 18 picks over 500%+ and 11 picks with over 1000%+ good points since January 2019 equivalent to:

  • Celsius Holdings (CELH) +2,320.0%
  • Enphase Power (ENPH) +2,210.6%
  • Northern Oil and Gasoline (NOG) +1,067.9%
  • Trillium Therapeutics (TRIL) +1008.7%

Greater than 300 shares have gained over 10% in a 5-day buying and selling week since this MDA testing started in 2017. A frequency comparability chart is on the finish of this text. Readers are cautioned that these are extremely risky shares that will not be applicable for attaining your long-term funding objectives: How to Achieve Optimal Asset Allocation

The Week 50 – 2022 Breakout Shares for subsequent week are:

The picks for subsequent week include 1 Client Cyclical, 2 Healthcare, and 1 Client Defensive sector shares. These alternatives are closely in China shares primarily based on document QE exercise to assist their markets. These shares are measured from launch to members prematurely each Friday morning close to the open for the perfect good points. Prior alternatives could also be doing nicely, however for analysis functions I intentionally don’t duplicate alternatives from the prior week. These alternatives are primarily based on MDA traits from my analysis, together with sturdy cash flows, optimistic sentiment, and robust fundamentals — however readers are cautioned to comply with the Momentum Gauges® for the perfect outcomes.

  1. ATRenew Inc. (RERE) – Client Cyclical / Web Retail
  2. TAL Schooling Group (TAL) – Client Defensive / Educations & Coaching Providers

ATRenew Inc. – Client Cyclical / Web Retail

RERE chart

Value Goal: $3.50/share (Analyst Consensus + Technical See my FAQ #20)

(Supply: Firm Assets)

ATRenew Inc., by way of its subsidiaries, operates pre-owned client electronics transactions and companies platform within the Individuals’s Republic of China. It primarily sells cellphones, laptops, tablets, drones, digital cameras, family merchandise, and baggage by way of its on-line platforms and offline shops, in addition to offers companies to third-party retailers to promote the merchandise by way of its platforms.

RERE report

TAL Schooling Group – Client Defensive / Educations & Coaching Providers

TAL chart

Value Goal: $9.00/share (Analyst Consensus + Technical See my FAQ #20)

(Supply: Firm Assets)

TAL Schooling Group offers Okay-12 after-school tutoring companies within the Individuals’s Republic of China. The corporate presents tutoring companies to Okay-12 college students masking numerous educational topics, together with arithmetic, physics, chemistry, biology, historical past, geography, political science, English, and Chinese language.

TAL report

Prime Dow 30 Shares to Look ahead to Week 50

First, be sure you comply with the Momentum Gauges® when making use of the identical MDA breakout mannequin parameters to solely 30 shares on the Dow Index. Circumstances have delivered the worst first half to the inventory market since 1970. Second, these alternatives are made with out regard to market cap or the below-average volatility typical of mega-cap shares that will produce good outcomes relative to different Dow 30 shares. The newest picks of weekly Dow alternatives in pairs for the final 5 weeks:

Image Firm Present % return from choice Week
V Visa Inc. -4.12%
(MRK) Merck & Co. -1.15%
V Visa Inc. +1.81%
(VZ) Verizon -2.38%
(HON) Honeywell Worldwide -1.35%
(V) Visa Inc. -1.00%
CVX Chevron Corp. -9.09%
DOW Dow Inc. -3.33%
(NKE) Nike Inc. +14.23%
(DOW) Dow Inc. +2.39%

In case you are searching for a much wider choice of giant cap breakout shares, I like to recommend these long-term portfolios. The brand new mid-year alternatives had been launched to members to start out July:

Piotroski-Graham enhanced value

  • July midyear at +7.41%
  • January portfolio beating S&P 500 by +27.93% YTD.

Positive Forensic

  • July midyear down -15.33%
  • January Optimistic Forensic beating S&P 500 by +8.72% YTD.

Negative Forensic

  • July midyear down -25.39%
  • January Detrimental Forensic beating S&P 500 by +27.56% YTD

Growth & Dividend Mega cap breakouts

  • July midyear down -0.67%
  • January portfolio beating S&P 500 by +12.89% YTD

These long-term alternatives are considerably outperforming many main Hedge Funds and all of the hedge fund averages since inception. Contemplate the actively managed ARK Innovation fund down -63.37% YTD, Tiger World Administration -58% YTD.

The Dow decide for subsequent week is:

McDonald’s (MCD)

McDonald’s is a robust defensive inventory as the following market pullback is ready to start. Establishments are web patrons int he present quarter and robust assist at $270/share might stabilize markets into the following downturn. Indicators are all optimistic with web MFI inflows.

Finviz Chart MCD

Background on Momentum Breakout Shares

As I’ve documented earlier than from my analysis over time, these MDA breakout picks had been designed as excessive frequency gainers.

These documented excessive frequency good points in lower than per week proceed into 2020 at charges greater than 4 instances greater than the common inventory market returns towards comparable shares with a minimal $2/share and $100 million market cap. The improved good points from additional MDA analysis in 2020 are each bigger and extra frequent than in earlier years in each class. ~ The 2020 MDA Breakout Report Card

The frequency percentages stay similar to returns documented right here on Searching for Alpha since 2017 and at charges that vastly exceed the good points of market returns by 2x and as a lot as 5x within the case of 5% good points.

MDA breakout frequency charts

The 2021 and 2020 breakout percentages with 4 shares chosen every week.

MDA Breakout frequency charts 2020/2021

MDA alternatives are restricted to shares above $2/share, $100M market cap, and better than 100k avg each day quantity. Penny shares nicely under these minimal ranges have been proven to learn vastly from the mannequin however introduce far more danger and could also be distorted by inflows from readers choosing the identical micro-cap shares.


These shares proceed the reside forward-testing of the breakout choice algorithms from my doctoral analysis with steady enhancements over prior years. These Weekly Breakout picks include the shortest length picks of seven quantitative fashions I publish from prime monetary analysis that additionally embody one-year purchase/maintain worth shares. Keep in mind to comply with the Momentum Gauges® in your investing selections for the perfect outcomes.

All of the V&M portfolio fashions are beating the market indices by way of the worst 6 month begin since 1970, document inflation and Fed tightening intervention. New mid-year value portfolios are once more main the foremost indices to start out the following long-term purchase/maintain interval.

V&M Breakout Portfolio returns YTD

The ultimate 2021 returns for the totally different portfolio fashions from January of final 12 months are proven under.

V&M Breakout portfolio returns 2021

All the easiest to you, keep protected and wholesome and have a fantastic week of buying and selling!

JD Henning, PhD, MBA, CFE, CAMS

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