This Week’s Sunday Stock Report – 2/10/18
– 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.
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4 BreakOuts This Past Week | 4 Stocks on Our WatchList for the Week
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[dropcap]T[/dropcap]his was the first full week of February trading, and U.S China trade tensions and global growth worries continued to weigh on the markets.
The major indexes tested key levels of support and also ran into resistance this past week.
In the end, the benchmarks managed to post weekly gains, following some late-Friday buying.
The Dow Jones Industrial Average notched a seventh weekly gain in a row.
The index recently broke above, and is now basically holding above, support of the 200-day moving average and the psychologically-25000.
Chart courtesy of stockcharts.com
For the week, the Nasdaq advanced just +0.5% as it was turned back from near-resistance of its 200-day moving average of 7,457.37,
Some support for this index is at the round-7000 and the coinciding 50-day moving average.
Chart courtesy of stockcharts.com
The S&P 500 index closed higher on Friday and avoided a three-day skid.
For the week, the index edged up just +0.1% and is now up +8% year to date.
The bellwether was sharply turned back from what is now resistance of its 200-day moving average, currently at 2742.
Support is at the round-2600 and the near coinciding 50-day moving average, previous lows, and a downward trendline.
Chart courtesy of stockcharts.com
We added a distribution day this week. The count remains low with now 2 on the S&P 500 and still just 1 on the Nasdaq.
Currently, the market continues in a confirmed uptrend. Major averages should be monitored for any continued distribution days. Both stocks and indexes should be watched closely if any near their respective support levels.
We had 4 breakouts from last week’s watch list. (see below)
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, yet did not find any new stocks to add to our weekly watch list. I will continue screening throughout the week and post any additions. If anyone is looking for any specific setups, long or short, please let me know.
We now have a total of 4 stocks which we will be watching for a traditional breakout to new highs. (see below)
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.
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BREAK OUT UPDATE:
This past week we had 4 breakouts from our weekly watch list.
All had trouble making any lasting headway and each closed the week with a loss.
Several of our previous watch list and breakout stocks are highlighted in this recently published IBD article here ->
Netflix, Splunk, ServiceNow Lead List Of New Buys By The Best Mutual Funds
| SYM | LAST | ADDED TO WATCH LIST |
TRIGGER PRICE |
BREAKOUT DATE |
MAX BUY PRICE | CURRENT % GAIN/ LOSS |
| ORLY | $360.23 | 12/30/18 | $363.30 | 2/7/19 | $381.47 | -0.85% |
| DG | $116.32 | 1/23/19 | $117.34 | 2/7/19 | $123.21 | -0.87% |
| DATA | $122.24 | 1/27/19 | $131.92 | 2/4/19 | $138.52 | -7.34% |
| TTD | $146.18 | 1/23/19 | $149.10 | 2/4/19 | $156.56 | -1.96% |
DG and TTD may have been held back by the market downdraft, while
DATA and ORLY were affected by earnings volatility. Further analysis on all 4 is below.
1 – O’Reilly Automotive Inc. (ORLY – Nasdaq)
This was an earnings breakout. Those are most-likely more volatile, as we know.
Shares did break out with a +142% increase in daily volume Thursday on the news.
| SYMBOL | LAST | ADDED TO WATCH LIST |
BREAKOUT DATE |
BREAKOUT PRICE |
| ORLY | $360.23 | 12/30/19 | 2/7/19 | $363.30 |
Chart courtesy of stockcharts.com
| MAX BUY PRICE | 1st SUPPORT |
2nd SUPPORT |
MAX STOP LOSS GUIDE | CURRENT % GAIN/LOSS |
| $381.47 | 50 DMA ($344.83) |
$333.00 | $334.24 | -0.85% |
There was a quick pullback on Friday with a continued spike in volume. This action could be characterized as earnings announcement related. However, if the above average volume declines continue next week, that would be a serious concern.
There is some support at the round-$350, but if shares pull back to there we could expect a test of the 50-day moving average just below at $344.83, so that is where I will put our 1st SUPPORT. The round-$350 is still an area to watch for an initial break.
Our 2nd SUPPORT will be the previous lows at $330.00.
2 – Dollar General Corporation (DG– NYSE)
Not a convincing breakout as shares cleared the TRIGGER PRICE by just 4 cents for only a very brief time on Thursday.
| SYMBOL | LAST | ADDED TO WATCH LIST |
BREAKOUT DATE |
BREAKOUT PRICE |
| DG | $116.32 | 1/23/19 | 2/7/19 | $117.34 |
Chart courtesy of stockcharts.com
| MAX BUY PRICE | 1st SUPPORT |
2nd SUPPORT |
MAX STOP LOSS GUIDE | CURRENT % GAIN/LOSS |
| $123.21 | 50 DMA ($110.10) |
200 DMA ($104.79) |
$107.95 | -0.87% |
There was a slight and quiet pullback the next day.
For now, I am going to have to put our 1st SUPPORT at the 50-day moving average, currently at $100.10. On a breakout to new highs, we can raise the 1st SUPPORT to the high of the base.
From here, gains above the TRIGGER PRICE, especially with volume, would still be buyable.
For those who already may have bought the initial breakout on Thursday, any declines would be a serious concern considering our 1st SUPPORT is more than -5% below Friday’s close.
A breach of $115.00 would be a technical violation with shares falling below a short-term upward trendline (seen on the chart above). That would be the first thing to watch for on the downside before any significant support levels come into play.
3 – Tableau Software Inc. (DATA– NYSE)
Was a risky BUY on Monday as the company was expected to report earnings the next day.
| SYMBOL | LAST | ADDED TO WATCH LIST |
BREAKOUT DATE |
BREAKOUT PRICE |
| DATA | $122.24 | 1/27/19 | 2/4/19 | $131.92 |
Chart courtesy of stockcharts.com
| MAX BUY PRICE | 1st SUPPORT |
2nd SUPPORT |
MAX STOP LOSS GUIDE | CURRENT % GAIN/LOSS |
| $138.52 | $118.00 | 200 DMA ($108.33) |
$121.36 | -7.34% |
Shares went on to sell off sharply on the news losing nearly -7% after the release.
The good news – the stock did find support near its 50-day moving average and some previous lows ($118 – 1st SUPPORT) and it also made a decent positive reversal on Friday in a down market.
I’m expecting this stock to make a complete recovery from the earnings sell-off. However, any trading below the previous low would be a very serious concern and trigger a SELL signal.
4 – The Trade Desk (TTD– Nasdaq)
Was a very nice, nearly by the book, breakout with on Monday with volume-backed gains above the stock’s TRIGGER PRICE.
| SYMBOL | LAST | ADDED TO WATCH LIST |
BREAKOUT DATE |
BREAKOUT PRICE |
| TTD | $146.18 | 1/23/19 | 2/4/19 | $149.10 |
Chart courtesy of stockcharts.com
| MAX BUY PRICE | 1st SUPPORT |
2nd SUPPORT |
MAX STOP LOSS GUIDE | CURRENT % GAIN/LOSS |
| $156.56 | 50 DMA ($131.65) |
200 DMA ($113.12) |
$137.17 | -1.96% |
Shares added a bit to those gains on Tuesday, before a sharp volume-backed sell-off of -5% on Wednesday which had shares falling back into the base. That is never a good sign for a fresh breakout. Thursday’s action brought further fast-paced declines of -4%.
Although Friday’s gains did help to lessen the loss, they were made on lighter volume, and do not negate this recent weakness.
This stock should be watched closely for any further declines.
A test of the 50-day moving average ($131.65) looks likely, especially if the broader market continues to pull in or weaken.
See This Week’s BreakOuts From Our…
Stock WatchList: Morning Update HERE
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YOU CAN REQUEST A COMPLIMENTARY COPY OF THIS WEEK’S COMPLETE SUNDAY STOCK REPORT AND WATCH LIST HERE