UNH - August MDA Breakout Stocks Week 32 - 2023: High-Frequency Gainers To Give You An Edge

2023-08-07 13:47:21 ET

Summary

• Two new Breakout Stocks for Week 32 curated by the MDA model for 10% short-term upside and additional model selections.
• This week two of four picks cleared the 10% mark in less than a week with peak gains in PLTR +18.0% and ARDX +13.1%.
• The Momentum Gauges continue to show positive signals, but caution is advised as market conditions are weakening and technology sector has turned negative.
• A sample MDA chart for APA Corporation is discussed as new enhancements are being developed.
• The streak of weekly picks gaining over 10% in less than a week has increased to 256 out of 323 trading weeks (79.2%) not including multiple gainers or warning signals.

Introduction

The Weekly Breakout Forecast continues my doctoral research analysis on MDA breakout selections over more than eight years. This high frequency breakout subset of the different portfolios I regularly analyze has now reached 320 weeks of public selections as part of this ongoing live forward-testing research. The frequency of 10%-plus returns in a week is averaging over four times the broad market averages in the past five years-plus.

In 2017, the sample size began with 12 stocks, then eight stocks in 2018, and at members' request since 2020, I now generate only four selections each week. In addition two Dow 30 picks are provided using the MDA methodology, but I highly recommend the monthly Growth & Dividend mega cap breakout portfolios if you're 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.

2023 Performance of the MDA Algorithm

• Last week two of four picks gained over the 10% mark in less than a week with peak gains in PLTR +18.02% and ARDX +13.1% while the S&P 500 declined -2.27%
• The streak of weekly picks gaining over 10% in less than a week has increased to 256 out of 323 trading weeks (79.2%) not including multiple gainers or key MG signals.
• Over the past one-year buy/hold the S&P 500 is up +7.81%.

This list was well received last week so I will again provide some of the ongoing top performers likely still in Segment 6 positive momentum. While these picks are intended for very short-term gains, we can see that some strong gainers continue from nearly every prior week this year. Stocks like MLTX and RIOT are well on their way to joining the V&M Multibagger list.

As long-term members know, this model generates high frequency breakouts with the current distribution of peak weekly gains year-to-date.

Currently 76 out of 124 selections (61.2%) have gained over 5% in only their measured week this year. These strong results are not adjusted for positive or negative market MG signals which further improve the results. These returns are consistent with prior years' performances even during Federal Reserve QE stimulus years of 2019 and 2020 over 104 weeks.

Warning: All published results are only possible for members. These stocks are measured from actual release on Friday morning to Friday close. Sample stocks are released publicly over the weekend.

Momentum Gauges Dashboard for Week 32

The Momentum Gauges continue positive in the longest positive signal this year from June 1, but weakening sharply from the July 13 highs. Market gauges have moved above negative 40 which nearly always leads to an official negative signal. Remember that market momentum is most important, then sector momentum, then stock MDA characteristics. You can be in an excellent stock, but if larger momentum conditions are leading to strong outflows to cash and safety it's harder for your stock to get a bid up in price.

Caution : Studies in the Members' Library show that selections in weeks when market conditions are above Negative 40 on the gauges tend to significantly underperform results than more positive momentum weeks. Nearly half the sectors have turned negative on the gauges this week.

Guide: Maximizing Market Returns With The Automated Momentum Gauges

You can find my long-term outlook articles here for 2023 that may carry on even longer than I forecasted as the Fed has stated that inflation could remain above their 2% target into 2025:

• Forecasting The S&P 500 For 2023: Year Of The Fed-Pivot And More Record Volatility
• Momentum Memo: Biggest Shift Into Lagging Value Sectors In Friday Breakout
• Momentum Mojo: Alternating Segment Breakouts Favor Oversold Value And Small Caps

Daily Momentum Gauges continue positive from the recent July 13 peak reaching the highest levels since June 2021. Negative momentum values are rising sharply above 40 level with strong similarities to the January pattern this year.

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're 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 or avoid major market downturns, 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.

Weekly Breakout 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).

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 many of these selections may join the V&M Multibagger list is now at 150 weekly picks with over 100%+ gains, 67 picks over 200%+, 19 picks over 500%-plus and seven weekly picks with over 1000%+ gains since January 2019 such as:

• Celsius Holdings (CELH) +2,934.2%
• Alexco Resources (AXU) +1,709.9%
• Super Micro Computer ( SMCI) +1,338.6%
• Trillium Therapeutics (TRIL) +1008.7%

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.

Historical Performance Measurements

Historical MDA Breakout minimal buy/hold (worst case) returns have a compound average growth rate of 36.6% and cumulative minimum returns of +917.6% 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 only the most conservative measurements adding each 52 minimal weekly return in an annual portfolio simulation, though each weekly selection could be compounded weekly.

The Week 32 - 2023 Breakout Stocks for next week are:

The MDA model selections for next week consist of two communications, one energy and one financial sector stocks. These selections are released in advance to members every Friday with strong current gains shown. It's not possible to duplicate published returns without member access to exclusive Friday morning release. Prior selections may be doing well, but for research purposes only new selections are used each week. These selections are based on MDA characteristics from my research and documented best results occur when following the Momentum Gauges and signals.

1. APA Corporation (APA) Stock Price Today, Quote & News) - Energy / Oil & Gas E&P
2. Hello Group (MOMO) Stock Price Today, Quote & News) - Communications / Internet Content

APA Corporation - Energy / Oil & Gas E&P

Price Target: $45/share (Analyst Consensus + Technical See my FAQ #20)

A sample of MDA charts in development is shown below for APA corporation using the S&P 500 gauges. Conditions in green represent Segment 6 MDA breakout and the red bars represent Segment 2 negative acceleration. All other conditions are shown in yellow. Approximate returns between signal changes is illustrated on the momentum gauge indicators.

Note : As stocks qualify on MDA breakout conditions for a weekly article writeup, we can never know how long the strong momentum will last and whether it is better to move on the first day of a breakout or wait for a few days of confirmation. We do know that it's harder for individual stocks to do well when the broader Market and Sector gauges are increasingly negative.

(Source: Company Resources)

APA Corporation, through its subsidiaries, explores for, develops, and produces natural gas, crude oil, and natural gas liquids. It has operations in the United States, Egypt, and the United Kingdom, as well as has exploration activities offshore Suriname.

Hello Group - Communications / Internet Content

Price Target: $15.0/share (Analyst Consensus + Technical See my FAQ #20)

(Source: Company Resources)

Hello Group Inc. provides mobile-based social and entertainment services in the People's Republic of China. The company offers Momo, a mobile application that connects people and facilitates social interactions based on location, interests, and various online recreational activities including, live talent shows, short videos, social games, as well as other video- and audio-based interactive experiences, such as online parties, mobile karaoke and user participated reality shows; Tantan, a social and dating application; and other applications under the Hertz, Soulchill, Duidui, and Tietie names.

(Source: StockRover )

Top Dow 30 Stocks to Watch for Week 32

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. Third, until the June 1 positive MG signal the Dow has been the worst performing major index with negative returns into May.

The Sample Dow Pick for Next Week is:

Johnson & Johnson (JNJ)

In strong positive momentum from July earnings beat. Institutional buyers are still net negative but improving with good forward valuations 14.9x earnings and no share dilution over the past five years. Analyst consensus target is $182.90/share with BUY ratings continuing from May as high as $185/share.

If you are looking for a much broader selection of large cap breakout stocks, I recommend these long-term portfolios . More details on the value stocks and ETF trading models go out in separate articles.

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.

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

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 since 2017. 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. Year-to-date returns do not show the peak gains following the signals.

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: