MNRL - Week 27 MDA Breakout Stocks - July 2022: Short-Term Picks To Give You An Edge

• Two new Breakout Stocks for Week 27 with better than 10% short-term upside potential and a Dow 30 Pick. Average cumulative returns now down to +85.6% YTD.
• No picks broke 10%+ in less than a week and the Negative Momentum Gauge® warning signals continue negative through 26 out of the last 31 weeks.
• All the V&M Portfolios are still beating the S&P 500 YTD led by the ETF portfolio +28.8%, Piotroski Value +1.09%, and Premium Portfolio -6.5%.
• The streak of weekly picks gaining over 10% in less than a week of trading days decreased to 217 out of 266 trading weeks (81.6%) not counting multiple gainers.
• The MDA breakout picks continue to beat the S&P 500 into 6 consecutive years delivering a CAGR +30.9% and 702.0% compounding returns through 2022. In 2021 returns were +70.5%.

Introduction

The Weekly Breakout Forecast continues my doctoral research analysis on MDA breakout selections over more than 7 years. This subset of the different portfolios I regularly analyze has now exceeded 260 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, as well as a new active ETF portfolio that competes against a signal ETF model. Monthly Growth & Dividend MDA breakout stocks continue to beat the market each year as well. I offer 11 top models of short and long term value and momentum portfolios that have beaten the S&P 500 since my trading S&P 500 since my trading studies were made public .

Market Outlook

The cumulative average weekly breakout returns for 2022 is down to +85.6% with the best case and worst case cumulative returns YTD of +192.8% and -21.5%. Using the official trading signals, we have had only 2 weeks of a positive MDA purchase signals in 2022 with the worst 6 month start to the stock market since 1970 and the worst Nasdaq returns ever.

In a quick study of the MDA breakout selections YTD there are 59 picks in 26 weeks beating the S&P 500. 36 picks are beating the S&P 500 by over 10% and as high as +78.6% ( TDW ), +52.4% ( RES ), +16.4% ( GNK ), and +14.9% ( MNRL ) significantly beating the major indices YTD.

Additional background, measurements, and high frequency breakout records on the Weekly MDA Breakout model is here .

Returns from 21 Weeks of Positive Momentum Gauge signals in 2021

Last year there were only 21 positive trading weeks to achieve +70.5% minimal returns. For 2022 the market has been even worse with only two official positive weekly signal on the Momentum Gauges® so far despite strong returns in many negative market weeks.

Momentum Gauge® trading signal: Negative conditions ahead of Week 27

2022 First-half weekly return results

Red weekly color indicates negative Market Momentum Gauge signals. MDA breakout selections outperform when the market signal is positive and daily negative values are below 40 level.

Historical Performance Measurements

Historical MDA Breakout minimal buy/hold returns are at +70.5% YTD when trading only in the positive weeks consistent with the positive Momentum Gauges® signals. Remarkably, the frequency streak of 10% gainers within a 4- or 5-day trading week continues at highly statistically significant levels above 80% not counting frequent multiple 10%+ gainers in a single week.

Longer term many of these selections join the V&M Multibagger list now at 92 weekly picks with over 100%+ gains, 44 picks over 200%+, 19 picks over 500%+ and 11 picks with over 1000%+ gains since January 2019 such as:

• Houghton Mifflin Harcourt ( HMHC ) +1413.8%
• Intrepid Potash ( IPI ) +1,296.2%
• Enphase Energy ( ENPH ) +1,315.2%
• Celsius Holdings ( CELH ) +1,303.4%
• Trillium Therapeutics ( TRIL ) +1008.7%

More than 200 stocks have gained over 10% in a 5-day trading week since this MDA testing began in 2017. A frequency comparison chart is 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

2022 Breakout Portfolio Returns

The Momentum Gauge® conditions into 2022 continue with highly negative warning signals with only two full weeks of positive conditions back in Week 12 and 22 of 2022 with returns of +1.19% following the signals and avoiding the worst 6 month market start since 1970.

The Breakout Picks are high volatility selections for high short-term gains, but with no selections below $2/share, under 100k average daily volume, or less than $100 million market cap. Prior returns are documented here:

• Value & Momentum MDA Breakouts +70.5% In 52 Weeks: Final 2021 Year End Report Card | Seeking Alpha Marketplace

2022 has already set records including the worst 100 day start to the stock market since 1939 and the Momentum Gauge® MDA buy signals continue negative ahead of next week.

Market Momentum Conditions

Why not avoid all the major market downturns? Why not avoid all the major market downturns? It is best to follow the signals as the Federal Reserve's Quantitative Tightening program has begun in June.

The Daily Market Momentum Gauges® remain negative from June 10th. Negative periods have lasted on average 11 days YTD compared with positive periods less than 3 days on average in 2022.

The Weekly Momentum Gauges® are still negative and have not had more than 2 consecutive positive weeks in the last 37 weeks from November 17th topping signal.

The S&P 500 Momentum Gauges® continue negative from June 9th.

The new Monthly Momentum Gauges® shown from the 2020 Covid-19 correction are 8 months negative from November and evaluate 7,500+ stocks on the US market.

All the Momentum Gauge® charts were made available last week in a special update report: Momentum Gauge Topping Signal: 3rd Negative Signal In 2022

All the momentum signals are negative through last week on declining momentum conditions. Performance of all the portfolios are greatly enhanced by following the signals and investing when more gauges are positive.

The Week 27 - 2022 Breakout Stocks for next week are:

The picks for next week consist of 1 Energy, 1 Financial, 1 Consumer Defensive and 1 Healthcare sector stocks. These stocks are released to members in advance every Friday morning near the open. 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. BP Prudhoe Bay Royalty Trust ( BPT ) - Energy / Oil & Gas Refining
2. MGP Ingredients ( MGPI ) - Consumer Defensive / Packaged Foods

BP Prudhoe Bay Royalty Trust ( BPT ) - Energy / Oil & Gas Refining

Price Target: $28.00/share (See my FAQ #20 on price targets)

(Source: FinViz )

BP Prudhoe Bay Royalty Trust operates as a grantor trust in the United States. The company holds overriding royalty interest in the Prudhoe Bay oil field located on the North Slope of Alaska. The Prudhoe Bay field extends approximately 12 miles by 27 miles and contains approximately 150,000 gross productive acres.

MGP Ingredients ( MGPI ) - Consumer Defensive / Packaged Foods

Price Target: $115.00/share (See my FAQ #20 on price targets)

(Source: FinViz )

MGP Ingredients, Inc., together with its subsidiaries, produces and supplies distilled spirits, branded spirits, and food ingredients. It operates through three segments: Distillery Products; Branded Spirits; and Ingredient Solutions. The Distillery Products segment provides food grade alcohol for beverage applications that include bourbon and rye whiskeys, as well as grain neutral spirits, including vodka and gin; and food-grade industrial alcohol, which is used as an ingredient in foods, personal care products, cleaning solutions, pharmaceuticals, and various other products.

Top Dow 30 Stocks to Watch for Week 27

First, be sure to follow the Momentum Gauges® when applying the same MDA breakout model parameters to only 30 stocks on the Dow Index. Conditions and signals remain very negative in the worst start of the stock year since 1970. 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:

If you are looking for a much broader selection of mega-cap breakout stocks beyond just 30 Dow stocks with more detailed analysis and strong returns I would recommend the Growth & Dividend MDA Breakout picks.

These selections are significantly outperforming major Hedge Funds and all the hedge fund averages since inception. Consider the actively managed ARK Innovation fund down -56.4% YTD, Tiger Global Management -52% YTD, RTW Investment Group -34% YTD.

The July 2022 portfolio for 1-year is down -16.4% and the July 2020 2-year portfolio is up +39.9% not including additional minimum 2%+ dividends.

• The January MDA Breakout Growth & Dividend
• The February MDA Breakout Growth & Dividend
• The March MDA Breakout Growth & Dividend
• The April MDA Breakout Growth & Dividend
• The May MDA Breakout Growth & Dividend portfolio
• The June MDA Breakout Growth & Dividend portfolio
• The new July MDA Breakout Growth & Dividend portfolio

The Dow pick for next week is:

Coca-Cola Company

Defensive sector stocks are showing early breakout conditions with better than average returns in 2022. Coca Cola is in early breakout above the negative channel from April with strong net MFI inflows and a move to safety and higher dividends as technology stocks continue to decline through June. Q2 Earnings are scheduled for July 26th with institutions net buyers in the current quarter.

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 are beating the market indices in the worst 100 day start to the US stock market since 1939 and the worst 6 month start since 1970. The new active ETF portfolio is up +28.2% YTD beating the S&P 500 by over +48% YTD.

The Top ETF returns in the Momentum Gauge® signal from June 10th are Energy and Semiconductor bear funds ( DRIP ) +65.0%, ( ERY ) +38.6%, and ( SOXS ) +42.4% as shown above:

The final 2021 returns for the different portfolio models from January of last year are shown below.

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:

Week 27 MDA Breakout Stocks - July 2022: Short-Term Picks To Give You An Edge