NOG - MDA Breakout Stocks/ETFs Week 11 - March 2023: High-Frequency Gainers To Give You An Edge

2023-03-12 08:03:25 ET

Summary

• Two new Breakout Stocks for Week 11 with better than 10% short-term upside and Dow 30 Picks. Average cumulative returns for 2023 are +37.6% YTD.
• The Momentum Gauges® continued negative with bear funds in the Active ETF with over 17% gains this week. SUP peaked at +20.9% for members.
• The streak of weekly picks gaining over 10% in less than a week has reached 240 out of 302 trading weeks (79.5%) 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 reached 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

The strong similarities to the August topping signal on the Momentum Gauges continue from February. I have been detailing these conditions on the gauges since they reached the highest positive (overbought) levels in January with strong risk of a market downturn. We are now watching to see if the gauges will test the very high negative levels last September to identify another change in market conditions.

• V&M Breakout Update - March 8th: Bear Bounce Fades Into February Breakdown
• Largest Market Topping Signal Since August As Fed Considers 50 Bps Rate Hike
• VIX Volatility Spiking Off The Lowest Levels in More Than A Year

My strategy for 2023 is to stay generally bearish while adjusting for any bounces in anticipation of strong similarities to the August topping pattern. Economic data, inflation, manufacturing productivity, home sales, continue to show recessionary weakness into rising interest rate hikes at the highest levels since 2008.

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

Momentum Gauges Dashboard for Week 11

Momentum Gauges followed the Technology sector gauges that turned negative on Monday. The signal to bear funds delivered very large returns this week over 17% for the active and Momentum Gauge portfolio with multiple funds over 20% in just a few days.

• Guide: Maximizing Market Returns With The Automated Momentum Gauges

As a reminder much greater detail is covered live every day in the Chat Rooms with current charts and signals. If you are not reviewing the latest charts and updates you could be missing out.

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).

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 113 weekly picks with over 100%+ gains, 49 picks over 200%+, 19 picks over 500%+ and 9 weekly picks with over 1000%+ gains since January 2019 such as:

• Celsius Holdings ( CELH ) +1,666.2%
• Enphase Energy ( ENPH ) +1,420.0%
• Northern Oil and Gas ( NOG ) +1,040.8%
• 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: 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.

The Week 11 - 2023 Breakout Stocks for next week are:

The picks for next week consist of 1 Technology, 1 Basic Materials, 1 Industrials and 1 Healthcare sector stocks. Momentum Gauge values continue highly negative and I caution against positive momentum picks this week. 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. Eldorado Gold ( EGO ) - Basic Materials / Gold
2. Voyager Therapeutics ( VYGR ) - Healthcare / Biotechnology

Eldorado Gold - Basic Materials / Gold

Price Target: $11.00/share (Analyst Consensus + Technical See my FAQ #20)

(Source: Company Resources)

Eldorado Gold Corporation, together with its subsidiaries, engages in the mining, exploration, development, and sale of mineral products primarily in Turkey, Canada, Greece, and Romania. The company primarily produces gold, as well as silver, lead, and zinc. It holds a 100% interest in the Kisladag and Efemcukuru gold mines located in western Turkey; 100% interest in Lamaque gold mines located in Canada; and Olympias, Stratoni, Skouries, Perama Hill, and Sapes gold mines located in Greece, as well as the 80.5% interest in Certej development projects located in Romania.

Voyager Therapeutics - Healthcare / Biotechnology

Price Target: $11.00/share (Analyst Consensus + Technical See my FAQ #20)

(Source: Company Resources)

Voyager Therapeutics, Inc., a gene therapy company, focuses on the development of treatments and next-generation platform technologies. The company's lead clinical candidate is the VY-AADC, which is in open-label Phase 1 clinical trial for the treatment of Parkinson's disease. Its preclinical programs comprise VY-SOD102 for the treatment of amyotrophic lateral sclerosis; VY-HTT01 for Huntington's disease; VY-FXN01 for Friedreich's ataxia; and Tau program for the treatment of tauopathies, including Alzheimer's disease, progressive supranuclear palsy, and frontotemporal dementia, as well as for spinal muscular atrophy.

Top Dow 30 Stocks to Watch for Week 11

As detailed last week the DJIA has moved into technical breakdown erasing all the gains back to November on the strong negative Momentum Gauge signals. The picks for next week are McDonald's ( MCD ) and Merck & Co. ( MRK ) but are not recommended while the index is in technical breakdown. Rather than focus on the best of the worst Dow stocks this week I will share the current Momentum Gauge ETF top funds as we trade the Momentum Gauge signals.

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. Top funds include ProShares Ultra VIX ( UVXY ) +30.65%, Direxion Daily S&P Biotech Bear ( LABD ) +25.6%, MicroSectors U.S. Big Banks bear ( BNKD ) +26.5%, Direxion Daily Financial bear ( FAZ ) +20.0%.

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. However, we have moved to negative signals on the gauges and market declines may continue. The returns shown below were the YTD gains before the Negative signal this week.

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:

Merck & Co.

Merck is another relatively strong Dow stock with net MFI inflows still positive but market weakness remains high and could further erode the Dow performance. I do not recommend Dow index stocks in the short term while the Momentum Gauges are so highly negative and following many strong similarities to the August topping pattern detailed in my articles linked above since January.

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. 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.

The final portfolio returns for 2022

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: