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home / news releases / UTSL - April MDA Breakout Stocks/ETFs Week 15 - 2023: High-Frequency Gainers To Give You An Edge


UTSL - April MDA Breakout Stocks/ETFs Week 15 - 2023: High-Frequency Gainers To Give You An Edge

2023-04-09 06:05:37 ET

Summary

  • Two new Breakout Stocks for Week 15 with better than 10% short-term upside, ETF updates and a Dow 30 Picks. Average cumulative returns for 2023 are +48.5% YTD.
  • Last week peak stock gains were in ATEX +11.62% continuing the streak of 10% gainers. Active ETF portfolio continues up +17.4% YTD.
  • The streak of weekly picks gaining over 10% in less than a week has reached 242 out of 306 trading weeks (79.0%) not considering multiple gainers or negative signals.
  • Annual returns are simulated by adding 52 weekly selections though they could be compounded weekly. Since inception over 450 stock picks have gained over 10% in less than a week.
  • The MDA breakout picks continue to beat the S&P 500 into 7 consecutive years delivering +708.2% compound returns through 2022 and a CAGR +30.87%.

Introduction

The Weekly Breakout Forecast continues my doctoral research analysis on MDA breakout selections over more than 8 years. This high frequency breakout subset of the different portfolios I regularly analyze has now exceeded 300 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 6+ 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 using the MDA methodology, but I highly recommend the monthly Growth & Dividend mega cap breakout portfolios if you are looking for larger cap selections beyond only 30 Dow stocks.

As long term investors know , you can compound $10,000 into $1 million with 10% annual returns in less than 50 years. This model serves to increase the rate of 10% breakouts into 52 weekly intervals instead of years. In 2022, the worst market since 2008: 113 MDA picks gained over 5%, 52 picks over 10%, 22 picks over 15%, and 13 picks over 20% in less than week.

2023 Market Outlook

Ongoing record market intervention from the Fed and Treasury including over $300 billion in emergency loans for banks are signaling to many that the Fed may have to pivot from QT and rate hikes sooner than planned. Comments from Jamie Dimon earlier in the week caused the banks to decline sharply that the "banking crisis is not over." These comments were countered by Fed member Bullard on Thursday who said the "lower yields are helping banks recover" and financials rebounded.

Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.”? Charles MacKay, Extraordinary Popular Delusions and the Madness of Crowds

My theory is that investors are crowding into "Too Big To Fail" stocks just as they deal with the recent bank collapses with large flows moving out of small banks into the larger "Too Big To Fail" banks. The returns into April by market cap segment continue to show this herding effect since March.

FinViz.com

The herding is especially obvious in the visual below, while the Russell 2000 small cap index continues negative for the year.

Yahoo Finance

In turn, the large movement into a concentration of mega cap stocks is causing the VIX volatility index to remain extremely low. The VIX index is based on options of the S&P 500 or the 500 largest stocks in the market where all the inflows have been heading recently for safety. We are still waiting for the S&P 500 to make even a 3rd daily move this year greater than +/- 2%.

VMBreakouts.com

My theory, based on the patterns and incredible events of 2018, 2020, and 2022 with low subsequent year volatility, is that investors crowd into S&P 500 index stocks after the most painful years. This crowding is contributing to extremely low VIX and low volatility of the "Market" index of 500 stocks, while omitting the 7,000+ smaller cap stocks that are lagging this year and not in the S&P 500 index for VIX measures.

Watch the Mega caps closely! If they breakdown, the market will break down sharply. Over the years we have only ever had major market downturns when the S&P 500 Momentum Gauges and the Technology Sector Gauges were negative as they are again now.

Momentum Gauges Dashboard for Week 15

Sector gauges, S&P 500 and Market gauges are mostly negative ahead of Week 15. The small cap Russell index is much more negative than the large cap Nasdaq 100 near the highest levels since August 2022. The Technology sector is a key bellwether for markets with just 3 mega cap stocks larger than the market cap of all the stocks combined in each of four entire sectors. Usually as the tech sector goes, so goes the "market" indices.

app.VMBreakouts.com

The daily Momentum Gauges show the quick reversal to negative conditions on weak labor data and reaction to comments about continuation of the bank crisis to start the week. The similarities between the Aug / Jan positive peaks, Sep / Mar momentum bottoms, and the current market chop are remarkably close in appearance. This has generated large gains in the bear funds for March and avoided significant downturns in the long portfolios much greater than 1% per week. We are in the noisy chop highlighted in yellow as the market tries to gain momentum.

app.VMBreakouts.com

Why do finance companies admit that "timing is everything," but when it comes to investing your money the majority tell their clients to "just buy/hold and try to ignore the downturns?" I submit most investors would rely on timing signals, but without a model like the gauges they are forced to try to keep their clients in buy/hold positions for 24 months with no gains, or worse.

If timing helps you gain just 1% a week, you will significantly outperform all the long term market averages.

Long time members know, we can consistently beat the markets by avoiding the most negative weeks and loading up during the most positive signals. Only the financial industry has incentives to make you to stay in the markets year round.

My strategy for 2023 is to stay generally bearish while adjusting for large bear bounces in anticipation of strong similarities to the August topping pattern. Economic data, inflation, manufacturing productivity, home sales, and the latest banking crisis continue to show recessionary weakness into rising interest rate hikes at the highest levels since Sep 2007.

Mid-year 2023 is where things may get interesting with potential for a Fed pivot. Dip-buyers will continue to try to pull this anticipated pivot event forward in time extending high market volatility while the Fed hikes rates. Mid-year I also plan to leverage strong results from a new June Russell Reconstitution anomaly we found last year that is actively tracked on the dashboard: FTSE Russell Reconstitution Anomaly Study - Strong +22.7% Difference After 5 Months

Some of my forecast articles for 2023 are here for your benefit.

Weekly Breakout Returns

The two weekly breakout portfolios are shown below with current 2023 returns. The ongoing competition between the Bounce/Lag Momentum model (from Prof Grant Henning, PhD Statistics) and MDA Breakout picks (from JD Henning, PhD Finance) are shown below with / without using the Momentum Gauge trading signal. The per-week returns equalize the comparison where there were only 16 positive trading weeks last year using the MDA trading signal (negative values below 40).

VMBreakouts.com

For 2022, the worst market since 2008: 113 MDA picks gained over 5%, 52 picks over 10%, 22 picks over 15%, and 13 picks over 20% in less than week . These are statistically significant high frequency breakout results despite many shortened holiday weeks.

V&M Multibagger List

While not the purpose of my model, longer term (using the trading video in FAQ #20) many of these selections may join the V&M Multibagger list now at 122 weekly picks with over 100%+ gains, 46 picks over 200%+, 16 picks over 500%+ and 9 weekly picks with over 1000%+ gains since January 2019 such as:

  • Celsius Holdings ( CELH ) +1,744.9%
  • Enphase Energy ( ENPH ) +1,281.1%
  • Alexco Resources AXU +1,275.7%
  • Northern Oil and Gas ( NOG ) +1,119.9%
  • Trillium Therapeutics TRIL +1,008.7%

More than 450 stocks have gained over 10% in less than a week since this MDA testing began in 2017. Frequency comparison charts are 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

Historical Performance Measurements

Historical MDA Breakout minimal buy/hold (worst case) returns have a compound average growth rate of 30.87% and cumulative minimum returns of +708.19% from 2017. The minimal cumulative returns for 2022 were -0.21%, average cumulative returns were +67.05%, and the best case cumulative returns were +360.25%. The chart reflects the most conservative measurements adding each 52 weekly return in an annual portfolio simulation, though each weekly selection could be compounded weekly.

VMBreakouts.com

The Week 15 - 2023 Breakout Stocks for next week are:

The picks for next week consist of 1 Consumer Cyclical, 1 Utilities, 2 Healthcare sector stocks. These selections are released in advance to members every Friday. 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 -- readers are cautioned to follow the Momentum Gauges for the best results.

  1. Build-A-Bear Workshop ( BBW ) - Consumer Cyclical / Specialty Retail
  2. Tactile Systems Technology ( TCMD ) - Healthcare / Medical Devices

Build-A-Bear Workshop - Consumer Cyclical / Specialty Retail

FinViz.com

Price Target: $30.00/share (Analyst Consensus + Technical See my FAQ #20)

(Source: Company Resources)

Build-A-Bear Workshop, Inc. operates as a multi-channel retailer of plush animals and related products in the United States, Canada, the United Kingdom and Ireland, as well as internationally. The company operates through three segments: Direct-to-Consumer, Commercial, and International Franchising. Its merchandise comprises various styles of plush products to be stuffed, pre-stuffed plush products, and sounds and scents that can be added to the stuffed animals, as well as range of clothing, shoes, accessories, and other toy and novelty items.

StockRover.com

Tactile Systems Tech - Healthcare / Medical Devices

FinViz.com

Price Target: $22.00/share (Analyst Consensus + Technical See my FAQ #20)

(Source: Company Resources)

Tactile Systems Technology, Inc., a medical technology company, develops and provides medical devices for the treatment of underserved chronic diseases in the United States. It offers Flexitouch Plus system, a pneumatic compression device for the treatment of lymphedema; Entre System, a portable pneumatic compression device for the at-home treatment of venous disorders, such as lymphedema and chronic venous insufficiency.

StockRover.com

Top Dow 30 Stocks to Watch for Week 15

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

Symbol
Company
Current % Return from Selection
(WMT)
Walmart Inc.
+2.15%
( BA )
The Boeing Company
-0.35%
((WMT))
Walmart Inc.
+6.23%
( PG )
Procter & Gamble Co.
+4.86%
( MSFT )
Microsoft Corp.
+3.58%
( INTC )
Intel Corporation
+9.51%
( MRK )
Merck & Co., Inc.
+3.88%
( MCD )
McDonald's Corp.
+6.57%
( AAPL )
Apple Inc.
+11.31%
( CSCO )
Cisco Systems, Inc.
+4.31%

If you are looking for a much broader selection of large cap breakout stocks, I recommend these long term portfolios with consecutive years of beating the S&P 500 and already achieving double-digit returns. As regular readers know, in March we moved to negative signals on the gauges and will be resuming a positive signal for April. The returns shown below are the 2023 YTD gains before the Negative signal on March 7th. Showing again how much timing matters.

VMBreakouts.com

V&M Breakouts: Examining The Best Long Term Value Portfolios For Turbulent Markets

New 2023 Piotroski-Graham enhanced value -

  • New January portfolio +17.89% YTD
  • 2022 January portfolio beat the S&P 500 by +32.54%

New 2023 Positive Forensic -

  • New January portfolio +18.34% YTD
  • January 2022 Positive Forensic beat S&P 500 by +6.59%

New 2023 Negative Forensic -

  • New January portfolio +13.32% YTD
  • January 2022 Negative Forensic beat S&P 500 by +22.18%

New Growth & Dividend Mega cap breakouts -

  • New March meg cap portfolio +4.95% YTD not including dividends
  • January 2022 portfolio beat S&P 500 by +13.91%

These long term portfolio selections have significantly outperformed many major hedge funds and all the hedge fund averages since inception.

The Dow pick for next week is:

Walmart

Walmart continues in a 3rd consecutive week of selections as a strong Consumer Defensive stock in strong breakout. Earnings beat strongly on Feb 21st and net MFI inflows continue as investors pursue good value. Analyst consensus target $162/share.

FinViz.com

Breakout ETF Portfolios

The Momentum Gauge timing model changes between bull/bear funds following the signals at the start of the next day. Members can outperform these returns following early signals and trading on the day of the signals before the close. The Sector Gauges continue mixed and the Active ETF portfolio is trading in the chop this week up +17.38% YTD. Leading funds in the first week of April, Direxion Daily Utilities Bull 3x Shares ( UTSL ) and Direxion Daily 20+ Year Treasury Bull 3x Shares (TMF) are shown below.

VMBreakouts.com

Year to date signal changes on the Bull/Bear Momentum Gauge ETF model are shown below. Be sure to read the Momentum Gauge guide for best results.

VMBreakouts.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.

VMBreakouts.com

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

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.

All the V&M portfolio models beat the market indices again last year with consistent outperformance of the major indices. All new portfolios are in a strong start to 2023 with many portfolios already in double-digit returns. Remember to follow the Momentum Gauges® in your investing decisions for the best results. Current returns are not the peak gains following the signals.

VMBreakouts.com

Portfolio returns for 2022

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

For further details see:

April MDA Breakout Stocks/ETFs Week 15 - 2023: High-Frequency Gainers To Give You An Edge
Stock Information

Company Name: Direxion Daily Utilities Bull 3X Shares
Stock Symbol: UTSL
Market: NYSE

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