SSR 3/24: Major Averages and Recent BreakOuts Negatively Reverse

This Week’s Sunday Stock Report – 3/24/18

– James F. Taulman, former Editor-in-Chief of the first independently licensed website to offer stock reports and services based on the CAN SLIM® investment system.

_____________________________________

5 BreakOuts This Past Week | 5 Stocks on Our WatchList for the Week

_____________________________________

[dropcap]A[/dropcap]fter a solid up week during the previous week, the major averages clearly struggled this past week and were certainly volatile.

Coming off the heels of a strong close the previous Friday, the market looked poised to continue the advance Monday, yet the day’s gains became modest and somewhat disappointing.

By Tuesday afternoon, we were already looking at a negative reversal on 2 of the 3 major averages, followed by continued declines on Wednesday.

We got a brief boost on Thursday as the Federal Reserve’s March meeting showed the central bank had trimmed its projections for interest rates this year from two to none.

Those gains were short-lived as all three major indexes fell sharply into negative territory on Friday after a reliable recession indicator from the bond market turned red. The yield on the 10-year Treasury note fell below the yield on the 3-month T-bill.

Stocks closed that day – their worst day in over 2 ½ months – with volume on the NYSE and Nasdaq was higher than Thursday’s levels, marking another distribution day.

For the week, the Dow Jones Industrials fell -1.3%.

Chart services courtesy of stockcharts.com. Annotations by James Taulman.

The Nasdaq posted its second-worst point drop in 2019, closing down -196 on Friday’s session and-0.06% on the week, well off of the mid-week highs.

Chart services courtesy of stockcharts.com. Annotations by James Taulman.

The S&P 500 lost -0.8% this past week, closing below the previous highs.

Chart services courtesy of stockcharts.com. Annotations by James Taulman.

The distribution day count as I understand stands at 5 on Nasdaq, and 7 on S&P 500. The uptrend is officially – “Under Pressure”.

The indices do remain above their respective 50 and 200 day moving averages, and those will become key areas to watch with any further technical deterioration.

As I always say – let your breakouts be your guide, and we had 5 breakouts from last week’s watch list, all have basically negatively reversed (several on their breakout day) and closed off of their breakout highs.

Four of the five are under their respective TRIGGER PRICE, with the only one above (WING) but by only +0.06%.

Regardless of market conditions, I am always preparing a watch list of high-ranked leaders which are building bullish technical bases. This week, I ran my routine stock screens and added 4 new stocks to our weekly watch list.

We currently have a total of 5 stocks which we will be watching for a traditional breakout to new highs. (see below) However, let’s keep in mind that with the broader market’s current condition – now is not the best time to be buying new breakouts. Now is the time to focus your attention on previous breakouts which are of course your current holdings. Breaks of support in individual issues are sell signals.

Questions? – Click here.

The last week of March will be a very busy one with regard to economic releases, with key reports coming out from several sectors.

As we always say – we let our breakouts be our guide, and we had 5 breakouts from last week’s watch list. (see below)

Questions? – Click here.

As always, if anyone has any questions – please feel free to email me at james@jamestaulman.com as I would be glad to assist you.

____________________________________________________

BREAK OUT UPDATE:

This past week we had 5 breakouts from our weekly watch list of 6 stocks.

Here is an update on all of this week’s breakouts.

SYM	LAST	ADDED TO WATCH LIST	BREAK OUT PRICE	BREAKOUT DATE	MAX BUY PRICE	CURRENT % GAIN/ LOSS
MPW	$18.54	3/17/19	$18.70	3/21/19	$19.64	-0.86%
SBUX	$71.96	3/17/19	$72.28	3/20/19	$75.89	-0.44%
GIB	$67.45	3/7/19	$68.27	3/19/19	$71.68	-1.20%
WING	$72.36	2/27/19	$72.32	3/19/19	$75.94	0.06%
NICE	$117.00	3/17/19	$119.35	3/18/19	$125.32	-1.97%

1 – Medical Properties Trust, Inc. (MPW -NYSE)

This is our most recent breakout as shares cleared their TRIGGER PRICE of $18.70 mid-session, Thursday.

The stock continued trading above there until about mid-day Friday when it struggled along with the broader market (Dow -400).

This breakout closed that day at the session lows, just under the TRIGGER PRICE, as volume was lighter the average.

SYM	LAST	ADDED TO WATCH LIST	BREAK OUT PRICE	BREAK OUT DATE	MAX BUY PRICE
MPW	$18.54	3/17/19	$18.70	3/21/19	$19.64

Chart services courtesy of stockcharts.com. Annotations by James Taulman.

1st SUPPORT	2nd SUPPORT	MAX STOP LOSS GUIDE	CURRENT % GAIN/LOSS
$18.50	50 DMA ($17.74)	$17.06	-0.86%

Shares now are basically at our 1st SUPPORT of the previous lows as of Friday’s close.

We also have near-coinciding support of the 50-day moving average, currently at $17.94.

A break below there would be a serious technical violation and a SELL signal.

Questions? – Click here.

2 –Starbucks Corporation (SBUX – Nasdaq)

This leader had been featured several times over the past months as it was first published in our special report on Oct., 14th – “High-Ranked Pullbacks to Support”.

On Jan., 20th it was added to our TrendLine SetUps WatchList where it broke out the following day, before getting in a solid uptrend to new all-time highs.

Shares then consolidated there, above $70, and built another base to buy off of. This stock was then added to the Technical SetUps WatchList, where it broke out on Wednesday.

However, it only traded above the TRIGGER PRICE of $72.28 very briefly that day (<5 mins).

SYM	LAST	ADDED TO WATCH LIST	BREAK OUT PRICE	BREAK OUT DATE	MAX BUY PRICE
SBUX	$71.96	3/17/19	$72.28	3/20/19	$75.89

Chart services courtesy of stockcharts.com. Annotations by James Taulman.

1st SUPPORT	2nd SUPPORT	MAX STOP LOSS GUIDE	CURRENT % GAIN/LOSS
50 DMA ($68.79)	N/A	$66.20	-0.44%

This breakout (like many this week) did close its breakout day well off of the session highs.

Shares did manage to trade back above their TRIGGER PRICE Thursday afternoon, and again briefly mid-day Friday.

SBUX is holding up relatively well, and it is now trading in a nascent uptrend staring with the lows on 3/8.

Considering our 1st SUPPORT is ~4% below Friday’s close, any above average volume declines with a break below that upward trendline would be a cause for some concern, especially if the broader market can not negate the recent bearish action.

Questions? – Click here.

3 – CGI Inc (GIB – NYSE)

This breakout only briefly traded above its TRIGGER PRICE of $68.27 near the open on Tuesday’s trading.

Then ths stock went on to negatively reverse the breakout day as it closed with a loss.

SYM	LAST	ADDED TO WATCH LIST	BREAK OUT PRICE	BREAK OUT DATE	MAX BUY PRICE
GIB	$67.45	3/7/19	$68.27	3/19/19	$71.68

Chart services courtesy of stockcharts.com. Annotations by James Taulman.

1st SUPPORT	2nd SUPPORT	MAX STOP LOSS GUIDE	CURRENT % GAIN/LOSS
50 DMA ($66.37)	$65.00	$62.05	-1.20%

There may be some initial areas of support at most recent lows, and the coinciding round-$67. At the least, this would be a key area to watch, on the downside.

Interested investors could still add this stock to their watch list, with the current TRIGGER PRICE of $68.27.

With that being said, I am putting our official 1st SUPPORT at the 50-day moving average, currently at $66.37.

Barring a new breakout, this stock looks likely to test there eventually.

Questions? – Click here.

4 – Wingstop Inc. (WING – Nasdaq)

This leader nearly broke out on Monday as price progress that day was rather ideal with shares basically making a steady climb, then closing the breakout day near the highs, yet missed making our TRIGGER PRICE by <.20 cents.

The stock then did officially trade above its posted TRIGGER PRICE of $72.32 very briefly on Tuesday.

Like several others, shares closed the breakout day lower.

SYM	LAST	ADDED TO WATCH LIST	BREAK OUT PRICE	BREAK OUT DATE	MAX BUY PRICE
WING	$72.36	2/27/19	$72.32	3/19/19	$75.94

Chart services courtesy of stockcharts.com. Annotations by James Taulman.

1st SUPPORT	2nd SUPPORT	MAX STOP LOSS GUIDE	CURRENT % GAIN/LOSS
$71.00	50 DMA ($67.86)	$66.57	+0.06%

The stock managed to climb higher throughout the week until hitting its peak Friday morning, before pulling back and closing the week just slightly above the TRIGGER PRICE.

Going forward, a break below the stock’s upward trendline would be the first concern.

There is some support near $71, then below there is the 50-day moving average, currently at $67.93, if things were to get that ugly.

Questions? – Click here.

5 – Nice Ltd (NICE – Nasdaq)

This was one of the few, if not the only breakout we’ve had recently with any real increase in volume.

Shares gapped open on Monday morning and traded above their TRIGGER PRICE of $119.35 while volume was +62% above normal.

SYM	LAST	ADDED TO WATCH LIST	BREAK OUT PRICE	BREAK OUT DATE	MAX BUY PRICE
NICE	$117.00	3/17/19	$119.35	3/18/19	$125.32

Chart services courtesy of stockcharts.com. Annotations by James Taulman.

1st SUPPORT	2nd SUPPORT	MAX STOP LOSS GUIDE	CURRENT % GAIN/LOSS
50 DMA ($112.78)	200 DMA ($110.75)	$107.64	-1.97%

The following day shares did pull back slightly, yet volume was half the regular rate, and this action was not too much of a concern.

Shares continued to modestly drift lower through mid-week, until Friday when there was a (non-news) gap down as volume remained below average.

An eclipse of Friday’s low would be a serious concern as there is no real support until the 50-day moving average, which is currently at $112.78.

Questions? – Click here.

See This Week’s BreakOuts From Our…

Stock WatchList: Morning Update HERE

_________________________________________________

YOU CAN REQUEST A COMPLIMENTARY COPY OF THIS WEEK’S COMPLETE SUNDAY STOCK REPORT AND WATCH LIST HERE