PBT - MDA Breakout Stocks Week 9 - March 2023: High-Frequency Gainers To Give You An Edge

Summary

• Two new Breakout Stocks for Week 9 with better than 10% short-term upside and a Dow 30 Pick. Average cumulative returns for 2023 are +35.8% YTD.
• This week, the Momentum Gauges® turned negative for the first time in 2023 with an early negative test signal Feb. 3rd warning of deteriorating market conditions.
• The streak of weekly picks gaining over 10% in less than a week has reached 239 out of 300 trading weeks (79.7%) not including 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 Dow has erased all the gains for 2023 now down below 33,000 support -2.0% YTD. I have released my latest market outlook article:

Largest Market Topping Signal Since August As Fed Considers 50 Bps Rate Hike

My strategy for 2023 is to stay bearish for the February cyclical pattern as discussed in my January forecast articles. With the Momentum Gauges turning negative, I expect to see high volatility and larger daily swings with lower highs and lower lows. See my latest market topping article above.

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 9

All Momentum Gauges including Sector Gauges have turned negative for the first time since last year. We have been watching the momentum decline from the highest positive levels in January since August 2022 in an early warning signal from February 3rd.

• Guide: Maximizing Market Returns With The Automated Momentum Gauges

Daily Momentum Gauges have turned negative after peaking from the highest positive levels since last August. Now we will watch to see how long the negative signal lasts and whether it goes as high as last September levels.

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 124 weekly picks with over 100%+ gains, 48 picks over 200%+, 19 picks over 500%+ and 9 weekly picks with over 1000%+ gains since January 2019 such as:

• Celsius Holdings ( CELH ) +1,858.9%
• Enphase Energy ( ENPH ) +1,338.6%
• Northern Oil and Gas ( NOG ) +1,103.0%
• 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 9 - 2023 Breakout Stocks for next week are:

The picks for next week consist of 1 Technology, 1 Healthcare and 2 Energy 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. Aravive, Inc. ( ARAV ) - Healthcare / Biotechnology
2. Permian Basin Royalty Trust ( PBT ) - Energy / Oil & Gas Midstream

Aravive, Inc. - Healthcare / Biotechnology

Price Target: $5.00/share (Analyst Consensus + Technical See my FAQ #20)

(Source: Company Resources)

Aravive, Inc., a clinical-stage biopharmaceutical company, develops treatments for life-threatening diseases, including cancer and fibrosis in the United States. Its lead product candidate is batiraxcept, an ultrahigh-affinity, decoy protein that targets the GAS6-AXL signaling pathway, which is in Phase III clinical trial for the treatment of platinum- resistant recurrent ovarian cancer; and in Phase Ib/II clinical trial for the treatment of clear cell renal cell carcinoma and pancreatic adenocarcinoma.

Permian Basin Royalty Trust - Energy / Oil & Gas Midstream

Price Target: $28.00/share (Analyst Consensus + Technical See my FAQ #20)

(Source: Company Resources)

Permian Basin Royalty Trust, an express trust, holds overriding royalty interests in various oil and gas properties in the United States. The company owns a 75% net overriding royalty interest in the Waddell Ranch properties comprising Dune, Judkins, McKnight, Tubb, Devonian, and Waddell fields located in Crane County, Texas. As of December 31, 2021, the Waddell Ranch properties contained 268 net productive oil wells, 38 net productive gas wells, and 50 net injection wells.

Top Dow 30 Stocks to Watch for Week 9

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:

Use caution as the 30 Dow stocks are breaking below key support this week with early technical breakdown conditions for the first time in 2023.

If you are looking for a much broader selection of large cap breakout stocks, I recommend these long term portfolios . All new long term portfolio selections for 2023 are off to strong starts with many of the long term portfolios significantly beating major indices already achieving double-digit returns.

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

New 2023 Piotroski-Graham enhanced value -

• New January portfolio +15.03% YTD
• 2022 January portfolio beat the S&P 500 by +32.54%

New 2023 Positive Forensic -

• New January portfolio +14.95% YTD
• January 2022 Positive Forensic beat S&P 500 by +6.59%

New 2023 Negative Forensic -

• New January portfolio +11.48% YTD
• January 2022 Negative Forensic beat S&P 500 by +22.18%

New Growth & Dividend Mega cap breakouts -

• New January meg cap portfolio -4.35% 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:

JPMorgan Chase & Co. ( JPM )

JPMorgan is holding up much better than most Dow stocks in the past week with institutions net buyers in the most recent quarter. Indicators are mixed but net MFI inflows remain positive for now even as the Dow breaks below 33,000 key support.

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 in a strong start to 2023 with many portfolios already in double-digit returns.

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: