Week 12 MDA Breakout Stocks – March 2022

Stock Market


Beach Birds dawn

Harsh Aggarwal / iStock via Getty Images

VM Breakout logo

VMBreakouts.com

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 reached 250 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 over 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 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 studies were made public:

The cumulative breakout return average for 2022 is + 42.21% not using the gauge signal. Officially, the MDA Breakout returns are still at 0% following the Momentum Gauge® signals and avoiding the major market declines YTD. This week we received our first positive buy signal on the Momentum Gauges after 17 consecutive weeks of negative signals since November.

2022 Breakout returns

VMBreakouts.com

Additional background on the Weekly MDA Breakout model: Value And Momentum MDA Breakouts + 70.5% In 52 Weeks: Final 2021 Year End Report Card

Returns from 21 Weeks of Positive Momentum Gauge signals in 2021

Last year there were only 21 positive trading weeks to achieve + 70.5% returns and we are still waiting for an official positive trading signal in 2022.

2021 Breakout Returns

VMBreakouts.com

Momentum Gauge® trading signal: Positive conditions ahead of Week 12

Portfolio Returns 2022

VMBreakouts.com

(Source: VMBreakouts.com) Red weekly color indicates negative Momentum Gauge signals over the last 10 weeks. MDA breakout selections tend to underperform when the signal is negative and above 40 level. This was an especially strong factor in 2021 showing cumulative returns below with and without the signal.

Annual Returns using MG signals

VMBreakouts.com

Historical Performance Measurements

The 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 up to 142 weekly picks with over 100% + gains, 61 picks over 200% +, 19 picks over 500% + and 7 picks with over 1000% + gains since January 2019 such as:

  • Intrepid Potash (IPI) + 1.926.9%
  • Enphase Energy (ENPH) + 1,234.2%
  • Celsius Holdings (CELH) + 1,094.9%
  • 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 Breakout Picks are high volatility selections for short-term gains, but with no selections below $ 2 / share, below 100k average daily volume, or less than $ 100 million market cap. Prior returns are documented here:

2022 marks the worst start to the stock market since 2009 and the Momentum Gauge® MDA buy signals have turned positive this week after 17 consecutive weeks since Week 46 of last year. It is best to follow the signals and avoid momentum stocks until conditions turn positive.

Breakout Returns annually

VMBreakouts.com

Market Momentum Conditions

The Market Momentum Gauges® based on 7,500+ stocks turned positive this week closing at Negative 17 and Positive 79.

Momentum Gauges

app.VMBreakouts.com

The S&P 500 gauges turned positive again early this week in a strong momentum signal closing at Negative 4 and Positive 48.

S&P 500 momentum gauges

app.VMBreakouts.com

Two conditional signals that are very important to watch:

  • Avoid / Minimize trading when the Negative score is higher than the Positive momentum score.
  • Avoid / Minimize trading when the Negative score is above 40 on the gauge.

The Week 12 – 2022 Breakout Stocks for next week are:

The picks consist of 2 Technology, 1 Consumer Cyclical, and 1 Healthcare sector stock. 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. Rambus (RMBS) – Technology / Semiconductors
  2. STAAR Surgical Co (STAA) – Healthcare / Medical Instruments

Rambus – Technology / Semiconductors

RMBS chart

FinViz.com

Price Target: $ 38.00 / share (See my FAQ # 20 on price targets)

(Source: FinViz)

Rambus Inc. provides semiconductor products in the United States, Taiwan, South Korea, Japan, Europe, Canada, Singapore, Asia, and internationally. The company offers DDR memory interface chips to module manufacturers and OEMs; physical interface and companion digital controller IPs for SoC designers; and portfolio of patents that covers memory architecture, high-speed serial links, and security products.

RMBS report

StockRover.com

STAAR Surgical Co – Healthcare / Medical Instruments

STAA chart

FinViz.com

Price Target: $ 110.00 / share (See my FAQ # 20 on price targets)

(Source: FinViz)

STAAR Surgical Company, together with its subsidiaries, designs, develops, manufactures, markets, and sells implantable lenses for the eye, and companion delivery systems to deliver the lenses into the eye. The company provides Visian implantable Collamer lens product family (ICLs) to treat visual disorders, such as myopia, hyperopia, astigmatism, and presbyopia; and Hyperopic ICL, which treats far-sightedness.

STAA Report

StockRover.com

Top Dow 30 Stocks to Watch for Week 12

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.

While I do not expect Dow stocks to outperform typical breakout stocks over the measured five-day breakout period, it may provide some strong additional basis for investors to judge future momentum performance for mega-cap stocks in the short- to medium-term. The most recent picks of weekly Dow selections in pairs for the last 5 weeks:

Symbol Company Current% return from selection Week
(TRV) The Travelers Companies + 3.79%
(CAT) Caterpillar + 2.83%
CVX Chevron Corporation + 2.67%
(WMT) Walmart Inc. + 4.95%
(AMGN) Amgen, Inc. + 5.88%
(MRK) Merck & Co., Inc. + 5.66%
(PG) The Procter & Gamble Company -6.10%
(KO) The Coca-Cola Company -3.90%
(DIS) The Walt Disney Co. -6.14%
(V) Visa, Inc. -2.48%

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 picks are released monthly for long term total return with strong returns that are leading the S&P 500 by + 15.03% through 2022. The new March selections are already up + 8.74% in a highly negative month for the S&P 500. The 2-year returns of monthly portfolios are shown below:

Growth & Dividend returns 1 year

VMBreakouts.com

Growth & Dividend returns 2 years

VMBreakouts.com

The Dow pick for next week is:

Home Depot (HD)

Home Depot has a strong double bottom rebound following the reaction to Feb 22nd earnings beat. Price has broken above the negative channel from January and setting up for a strong recovery with high net MFI inflows. The next test is a breakout above current resistance at 340 / share with analyst consensus target at 384 / share.

Finviz Chart HD

FinViz.com

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.

MDA Breakout frequency charts

VMBreakouts.com

The 2021 and 2020 breakout percentages with 4 stocks selected each week.

MDA Breakout frequency charts

VMBreakouts.com

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 types are beating the S&P 500 that is down -6.36% for 2022. The new active ETF portfolio is up + 4.98% YTD or beating the S&P 500 by + 11.3% into March YTD.

2022 portfolio returns YTD

VMBreakouts.com

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

2021 Portfolio Returns

VMBreakouts.com

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

JD Henning, PhD, MBA, CFE, CAMS



Source link

Leave a Reply

Your email address will not be published.