CELH - MDA Breakout Stocks Week 6 - February 2023: High-Frequency Gainers To Give You An Edge

Summary

• Two new Breakout Stocks for Week 6 with better than 10% short-term upside and two Dow 30 Picks. Average cumulative returns for 2023 are +28.2% YTD.
• This week 3 of 4 high-frequency breakout picks gained over 10% in less than a week with peak gains in TOUR +20.3%, RIVN +12.8%, JMIA +22.1%.
• The streak of weekly picks gaining over 10% in less than a week has reached 239 out of 298 trading weeks (80.2%) not including multiple gainers or signals.
• Annual returns are simulated by adding 52 weekly selections though they could be compounded weekly. Top annual gainers have joined the growing multi-bagger list.
• The MDA breakout picks continue to beat the S&P 500 for 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 290 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 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

My strategy for 2023 is to stay bullish on China as the largest economy still in QE and stimulating their markets, while all other major economies are in QT fighting inflation. I plan to overweight US treasuries/bonds as explained in the 2023 technical forecast article while remaining cautious on US stocks following the gauge signals. Short term we are seeing an early top in bonds and China stocks after strong January gains. The early negative test signal has also begun for an early warning signal of market downturns. The official negative Momentum Gauge signal has not started, but conditions are very elevated, see gauge section below.

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

The schedule of reports and forecast articles for 2023 are here for your benefit.

• Article Schedule for 2022/2023
• The Best Portfolio Models since 2007 compared to Value & Momentum Portfolio Models YTD
• Forecasting The S&P 500 For 2023: Year Of The Fed-Pivot And More Record Volatility ( SP500 ).

Momentum Gauges® Stoplight ahead of Week 6.

All the Daily Momentum Gauges continue positive this week including monthly gauges. The positive levels continue near the highest levels since August 2022 that corresponded with a prior market peak.

Daily Momentum Gauges continue positive to the highest levels since last August. We have not seen positive gauge levels sustain this high for very long over the past two years. The negative early test signal begins with 3 consecutive days of rising negative values and declines in the momentum gauge differences.

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 122 weekly picks with over 100%+ gains, 50 picks over 200%+, 19 picks over 500%+ and 10 weekly picks with over 1000%+ gains since January 2019 such as:

• Celsius Holdings ( CELH ) +1.860.2%
• Enphase Energy ( ENPH ) +1,511.9%
• Northern Oil and Gas ( NOG ) +1,097.0%
• Trillium Therapeutics ( TRIL ) +1008.7%

More than 450 stocks have gained over 10% in a 5-day trading 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 6 - 2023 Breakout Stocks for next week are:

The picks for next week consist of 1 Financial, 2 Healthcare, and 1 Basic Material 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. Erasca Inc. ( ERAS ) - Healthcare / Biotechnology
2. EZCORP, Inc. ( EZPW ) - Financial / Credit Services

Erasca Inc. - Healthcare / Biotechnology

Price Target: $7.00/share (Analyst Consensus + Technical See my FAQ #20)

Morgan Stanley price target Feb 3, 2023 is $15/share.

(Source: Company Resources)

Erasca, Inc., a clinical-stage biopharmaceutical company, focuses on discovering, developing, and commercializing therapies for patients with RAS/MAPK pathway-driven cancers. The company's lead candidates include ERAS-007, an oral inhibitor of ERK1/2 for the treatment of non-small cell lung cancer, colorectal cancer, and acute myeloid leukemia; and ERAS-601, an oral SHP2 inhibitor for patients with advanced or metastatic solid tumors.

EZCORP, Inc. - Financial / Credit Services

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

(Source: Company Resources)

EZCORP, Inc. provides pawn services in the United States and Latin America. The company operates through three segments: U.S. Pawn, Latin America Pawn, and Other Investments. It offers pawn loans collateralized by tangible personal property, jewelry, consumer electronics, tools, sporting goods, and musical instruments.

Top Dow 30 Stocks to Watch for Week 6

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:

In addition to the weekly breakout picks, all new long term portfolio selections for 2023 have started!! See the stock release articles below for more details. So far a majority of the portfolios are also beating major indices again this year.

If you are looking for a much broader selection of large cap breakout stocks, I recommend these long term portfolios . The new 2023 selections have been released in the links below to members to start the New Year:

New 2023 Piotroski-Graham enhanced value -

• New January portfolio +16.30% YTD
• 2022 January portfolio beat the S&P 500 by +32.54%

New 2023 Positive Forensic -

• New January portfolio +11.58% YTD
• January 2022 Positive Forensic beat S&P 500 by +6.59%

New 2023 Negative Forensic -

• New January portfolio +22.11% YTD
• January 2022 Negative Forensic beat S&P 500 by +22.18%

New Growth & Dividend Mega cap breakouts -

• New January meg cap portfolio -2.17% YTD not including dividends
• January 2022 portfolio beat S&P 500 by +13.91%

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 -66.97% YTD, Tiger Global Management -58% YTD.

The Dow pick for next week is:

Procter & Gamble Company

Procter & Gamble Q4 earnings beat on January 19th with inflows and sentiment indicators improving. Watch for more indicators to turn positive in early potential breakout with corporate buybacks still continuing over the last 5 years and strong dividends. Next resistance is back up to $150/share.

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. Remember to follow the Momentum Gauges® in your investing decisions for the best results.

All the V&M portfolio models beat the market indices again last year with consistent outperformance of the major indices. All new portfolios are starting for 2023!!

The final portfolio returns for 2022

All the very best to you, stay safe and healthy and have a great week of trading!

For further details see: