Weekly Breakout Predictions continues my analysis of PhD research on MDA Weekly Breakout Picks for more than 7 years. This subset of different portfolios that I analyze regularly have now reached over 240 weeks of generic selections as part of this ongoing, live test search.
In 2017, my sample size started with 12 stocks, then 8 stocks in 2018, at the request of members since 2020, I am now creating 4 picks every week, 2 Dow 30 picks, and new ETF/ETF portfolios And the monthly growth and dividend MDA breakout. I present 11 examples of short and long-term value and momentum portfolios that have beaten the S&P 500 since my trading studies were announced:
The 2022 charts and tables will be restarted with more weekly data.
Returns from 21 Weeks of Positive Momentum Scale Signals in 2021
Momentum Gauge® trading signal: Negative conditions before the second week
(Source: VMBreakouts.com) Weekly red shows how weak market momentum and investor enthusiasm is during the week when the Negative Momentum Index® is above 40. This was a particularly strong factor in 2021 showing cumulative returns with and without the signal.
Historical performance metrics
Minimum Buy/Wait MDA Breakout Returns at +70.5% YTD when trading only on positive weeks consistent with positive Momentum Gauges® signals. Remarkably, the frequency streak for 10% of the gainers during a 4 or 5 day trading week continues at highly statistically significant levels above 80% not counting the repeating frequency 10% + gainers in 1 week.
In the long run, many of these picks join the V&M Multibagger roster now up to 167 weekly picks with over 100%+ gains, 69 picks with over 200%+, 20 picks over 500%+ and 3 picks with over 1, 000%+ gains since January 2019 like as:
- Intrepid Potash (IPI) + 1,139.0%
- Holdings Percentage (CELH) + 1,061.7%
- Trillium Therapy (TRIL) + 1008.7%
Over 200 stocks have gained more than 10% in a 5-day trading week since this MDA tester began in 2017. There is a frequency comparison chart at the end of this article. Readers are cautioned that these stocks are highly volatile and may not be suitable for your long-term investment goals: How to achieve optimal asset allocation
2022 Penetration Portfolio Returns
While in negative Momentum Gauge® conditions, the current measured returns for 2022 are 0% with no trading in the first week.
Breakout options are highly volatile options for short-term gains, but with no options under $2/share, less than 100,000 average daily volume, or less than $100 million in market capitalization. Past returns are documented here:
For 2021, the maximum average weekly returns were +10.27% for a total of 534.0% maximum returns to date. Using the blind buy/hold approach and not following the Momentum Gauges ® Momentum Scale results in an average weekly minimum return of -0.75%. The average weekly return for the S&P 500 is +0.50% since the beginning of the year.
Market Momentum Terms
Get Waitlisted for a Free Private Beta Test of Momentum Gauges® Live Metrics Before the Private Beta Expires: Value and Momentum Breakthroughs – Top Two-Digit Success Financial Models
The Momentum ® scale closed at negative 77 and positive 73 at high negative levels well above 40. Both high values reflect the wide sectoral difference between the positive energy/financial and negative technology/healthcare sectors.
Two police signals that are very important to watch:
- Avoid/reduce trading when the negative degree is higher than the positive momentum degree.
- Avoid/reduce trading when the negative score is above 40 on the scale.
Week 2 – 2022 The breakout stocks for the next week are:
The choices consist of 1 consumer cyclical stock, 1 industrial stock and 2 energy sector stock. These shares are released to members in advance every Friday morning near the opening. Previous selections might be fine, but for research purposes, I’m not duplicating selections from the previous week. These choices are based on the characteristics of MDA including strong financial flows, positive emotions, and fundamentals – but readers are cautioned to follow Momentum Gauges® for best results.
- Tidewater Inc. (TDW) Energy/Oil & Gas Equipment & Services
- Winnebago Industries (WGO) Industries / farms and heavy machinery
Tidewater Inc. Energy/Oil & Gas Equipment & Services
Target price: $16.00/share (see FAQ #20 about price target)
Tidewater Inc. offers , along with its subsidiaries, provides offshore transportation and support services to the offshore energy industry by operating a fleet of offshore service vessels worldwide. Provides services in support of offshore oil and natural gas exploration, field development, and production, as well as the development and maintenance of wind farms, including towing and anchor handling for mobile offshore drilling units; Transportation of supplies and personnel necessary to continue drilling, maintenance and production activities; offshore construction, seismic and subsea support; geotechnical survey support for wind farm construction; And many specialized services, such as laying pipes and cables.
Source: company resources
Winnebago Industries Industries / farms and heavy machinery
Target price: $90.00/share (see FAQ 20 about price target)
Winnebago Industries, Inc. manufactures and sells recreational vehicles and marine products primarily for use in leisure travel and outdoor recreation activities. The company operates in six divisions: Grand Design Towables, Winnebago Towables, Winnebago Motorhomes, Newmar Motorhomes, Chris-Craft Marine and Winnebago Specialty Vehicles. Provides towable products which are non-motorized vehicles towed by cars, vans, SUVs or vans for use as temporary accommodation for leisure travel, such as traditional travel trailers, fifth wheels, folding camper trailers, and truck campers under the brand names Winnebago and Grand Design.
Source: company resources
Top 30 Dow Stocks to Watch for Week 2
First, make sure you follow Momentum Gauges® when applying the same parameters of the MDA breakout pattern to only 30 stocks on the Dow. Second, these choices are made regardless of market capitalization or lower-than-typical volatility for mega stocks that might do well compared to other Dow 30 stocks.
While I don’t expect Dow Jones stocks to outperform typical breakout stocks during the five-day breakout period, they may provide an additional strong basis for investors to judge the performance of the massive stock’s future momentum in the short to medium term. Latest Dow Jones Weekly Picks in pairs for the last 5 weeks:
|Code||company||The current rate of return from the week of selection|
|(INTC)||Intel Corporation||+ 3.77%|
|(dow)||Dow company||+ 4.20%|
|CSCO||Cisco Systems, Inc.||-1.72%|
|daw||Dow company||+ 7.18%|
|(MRK)||Merck & Co., Inc.||+ 6.09%|
|(VZ)||Verizon Communications||+ 2.01%|
|CSCO||Cisco Systems, Inc.||+ 5.05%|
|(IBM)||International Business Machines||+ 8.45%|
|(CSCO)||Cisco Systems, Inc.||+ 8.71%|
|(CVX)||Chevron Corporation||+ 9.28%|
If you are looking for a much broader selection of the 30+ mega breakout stocks of Dow Jones stocks with more detailed analysis and solid returns, I would recommend Growth and Profits MDA Breakout Choices.
These options are issued monthly for the long-term total return. +13.90% weighted average monthly returns does not include large earnings of over 2%+ per share. Two-year portfolio returns are shown below with 24 positive portfolios excluding three.
The Dow pick for the next week is:
Caterpillar Corporation (CAT)
Caterpillar continues with strong penetration conditions across all alternative indicators of positive investor sentiment and high net flows of incoming MFIs. Analysts continue to have outperforming buy/outperform ratings and agreed targets around $230 per share.
Background on Momentum Breakout Stocks
As I’ve documented before from my research over the years, these MDA breakout picks are designed as high-frequency gainers.
These documented high-frequency gains continue in less than a week into 2020 at rates that are four times higher than average stock market returns against comparable stocks with a minimum of $2/share and $100 million. Enhanced gains from more MDA research in 2020 are larger and more frequent than in previous years in each category. ~ 2020 MDA Hacking Report Card
Recurrence rates remain very similar to the returns documented here when searching for alpha since 2017 and with rates that vastly exceed 2x market returns gains and 5x in the case of 5% gains.
(value and momentum breakthroughs)
Penetration rates 2021 and 2020 with 4 stocks selected each week.
MDA selections are limited to stocks over $2/share, $100 million market cap, and over 100,000 average daily volume. Penny stocks well below these lower levels have been shown to benefit greatly from the model but present more risk and may be distorted by inflows from readers choosing the same small cap stocks.
These stocks continue the straight forward testing of penetration selection algorithms from my PhD research with continuous improvements over previous years. These weekly breakout picks consist of a shorter term selection of seven quantitative models that I publish from top financial research that also includes 1 year stock buying/holding. Remember to follow Momentum Gauges® in your investment decisions to get the best results.
Final 2021 returns for the various portfolio models from January of last year are shown below. The main portfolios for the first week of 2022 are Piotroski-Graham + 5.09%, Negative Forensic + 4.62%, Premium Portfolio + 2.09%, and the new active ETF + 5.06%.
All the best to you, stay safe and healthy and have a great week of trading!
JD Henning, Ph.D., MBA, CFE, CAMS