2023-03-26 09:16:25 ET
Summary
- Two new Breakout Stocks for Week 13 with better than 10% short-term upside and a Dow 30 Pick. Average cumulative returns for 2023 are +47.4% YTD.
- The Momentum Gauges® continue negative in bear funds from Mar 7th led by BNKD +62.4%. Last week peak gains were RIOT +31.0%, SVM +15.9%, NVDA +6.3%.
- The streak of weekly picks gaining over 10% in less than a week has reached 241 out of 304 trading weeks (79.2%) 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 exceeded 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
Treasury Secretary Yellen convened an unscheduled meeting of the Financial Stability Oversight Council ((FSOC)) on Friday. Ongoing record market intervention from the Fed and Treasuring including over $300 billion in emergency loans for banks added to the Fed balance sheet are signaling to many that the Fed may have to pivot away from QT and rate hikes sooner than planned. Without the disruptive interventions, the strong similarities to the August topping signal on the Momentum Gauges continue from February. First the gauges reached the highest positive (overbought) levels in January with strong risk of a market downturn. Now we are watching the market breakdown to very high negative gauge levels to see if the gauges will test the high negative levels last September as we look for the next 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
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 are forced to try to retain their clients in buy/hold positions for 24 months with no gains, or worse.
My strategy for 2023 is to stay generally bearish while adjusting for large bear bounces in anticipation of strong similarities to the August topping pattern. Economic data, inflation, manufacturing productivity, home sales, and the latest banking crisis continue to show recessionary weakness into rising interest rate hikes at the highest levels since Sep 2007.
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
Some of my forecast articles for 2023 are here for your benefit.
- Forecasting The S&P 500 For 2023: Year Of The Fed-Pivot And More Record Volatility ( SP500 )
- Largest Market Topping Signal Since August As Fed Considers 50 Bps Rate Hike
- Value, Momentum Breakout View: Debt Ceiling 'Extraordinary Measures' And Fed's QT Program
Momentum Gauges Dashboard for Week 13
Momentum Gauges continue highly negative with all the sectors negative and many improving again off the lows. Basic Materials and Consumer Defensive sectors are the closest to turning positive on the strong move to Gold/Silver for safety. The negative signal for March has generated large gains for bear funds led by ( BNKD ) +62.4%, ( FAZ ) +36.8%, ( LABD ) +30.7%, ( TZA ) +22.5% ( UVXY ) +17.8%, ( DRIP ) +22.0%,
Positive gauges peaked in January at the highest levels since last August. Now we are watching for a peak in the negative gauges near the highest levels since September as the market continues to decline. The Russell index shown as the blue line reached the lowest levels this week since October 14, 2022.
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 117 weekly picks with over 100%+ gains, 45 picks over 200%+, 17 picks over 500%+ and 8 weekly picks with over 1000%+ gains since January 2019 such as:
- Celsius Holdings ( CELH ) +1,824.6%
- Enphase Energy ( ENPH ) +1,317.1%
- Trillium Therapeutics +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 13 - 2023 Breakout Stocks for next week are:
The picks for next week consist of 1 Healthcare, 2 Basic Materials, and 1 Communications 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.
- MAG Silver Corp. ( MAG ) - Basic Materials / Silver
- Starbox Group Holdings ( STBX ) - Communications / Internet Content
MAG Silver Corp. - Basic Materials / Silver
Price Target: $15.00/share (Analyst Consensus + Technical See my FAQ #20)
Mar-24-23 08:32AM | Is the Options Market Predicting a Spike in MAG Silver Stock? Zacks |
Feb-16-23 08:22AM | MAG Silver Closes C$23 Million Common Share Flow-Through Private Placement GlobeNewswire |
Feb-07-23 08:32AM | Mag Silver Closes US$42.6 Million Common Share Offering GlobeNewswire |
Feb-03-23 08:30AM | Do Options Traders Know Something About MAG Silver Stock We Don't? Zacks |
(Source: Company Resources)
MAG Silver Corp. engages in the exploration and development of precious metal mining properties. The company explores for silver, gold, lead, and zinc deposits. It primarily holds 44% interest in the Juanicipio project located in the Fresnillo District, Zacatecas State, Mexico
Starbox Group Holdings - Communications / Internet Content
Price Target: $5.00/share (Analyst Consensus + Technical See my FAQ #20)
Mar-24-23 07:30AM | Starbox Secures a 3-Year Contract Valued at $2.8 Million for Licensing its Software GlobeNewswire |
Mar-22-23 07:30AM | Starbox A.I. Calculation Engine Marks a Significant Breakthrough in the Emerging Ecosystem of Rebates GlobeNewswire +18.22% |
Mar-07-23 07:30AM | Starbox Cash Rebates System Enters The Philippines Market, Its First Overseas Market Opening GlobeNewswire |
Jan-20-23 05:09AM | A Closer Look At Starbox Group Holdings Ltd.'s [NASDAQ:STBX] Impressive ROE Simply Wall St. |
Jan-18-23 04:10PM | Starbox Group Holdings Ltd. Announces Financial Results for Fiscal Year 2022 - Revenue Increases By 127.2% and Net Income Increases By 148.8% PR Newswire |
(Source: Company Resources)
Starbox Group Holdings Ltd., through its subsidiaries, provides cash rebate and digital advertising services to retail merchant advertisers through websites and mobile apps in Malaysia. It connects retail merchants with individual online and offline shoppers to facilitate transactions through cash rebate programs offered by retail merchants. The company operates GETBATS website and mobile app that feature cash rebates from merchants in over 20 industries, such as automotive, beauty and health, books and media, electronics, fashion, food and beverages, groceries and pets, home and living, and sports and entertainment.
Top Dow 30 Stocks to Watch for Week 13
As detailed in the past few weeks the DJIA has moved into technical breakdown erasing all the gains back to November on the strong negative Momentum Gauge signals. The Dow pick for next week is defensive stock Procter & Gamble ( PG ) but has greater risk while the DJIA index is in negative channel breakdown. The February market correction continues to follow the Momentum Gauge topping signals of April and August that reached new market lows. 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 before the close. Top funds from the March 7th signal include MicroSectors U.S. Big Banks Index -3X Inverse Leveraged ETN ( BNKD ) +62.4%, Direxion Daily Financial Bear 3x Shares ETF ( FAZ ) +36.8%, Direxion Daily S&P Biotech Bear 3x Shares ETF ( LABD ) +30.7%, Direxion Daily Small Cap Bear 3x Shares ETF ( TZA ) +22.5%, ProShares Ultra VIX Short-Term Futures ETF ( UVXY ) +17.8%, Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 2x Shares ETF ( DRIP ) +22.0%
The Active ETF portfolio with buy/sell trading alerts for members is up +20.2% YTD with most of the gains from bear funds so far this year.
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 are the 2023 YTD gains before the Negative signal on March 7th. Showing again how much timing matters.
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 January portfolio +18.34% YTD
- January 2022 Positive Forensic beat S&P 500 by +6.59%
- 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:
Procter & Gamble
Procter & Gamble is a strong consumer defensive sector stock as the defensive sector is improving on the sector gauges while investors look for safety. Both JPMorgan and UBS have upgraded the stock to Buy with targets at $155 and $163/share respectively. Valuations are still high and institutions and insiders are net sellers 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.
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. Current returns are not the peak gains following the signals.
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:
MDA Breakout Stocks/ETFs Week 13 - March 2023: High-Frequency Gainers To Give You An Edge