SUN 3/17: Rally Holds – 2 BreakOuts, 3 WatchList Additions
This Week’s Sunday Stock Report – 3/17/18
– 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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2 BreakOuts This Past Week | 6 Stocks on Our WatchList for the Week
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[dropcap]A[/dropcap]fter suffering its worst week of 2019 last week, the market came roaring back this past week.
Although the troubles of Boeing (BA) weighed heavily on the Dow, the Nasdaq and the S&P 500 closed at 5-month highs. Investors dismissed a batch of data that was less-than-stellar and instead focused on progress with the China trade talks. The latest moves by Chinese authorities were taken as an optimistic sign that a U.S.-China trade deal might be getting closer.
Thanks to this spectacular post-Christmas rally, the benchmarks are now only a few percentage points from their all-time highs.
Major global markets are enjoying a boomlet in the first three months of 2019, underpinned at least in part by central banks of developed countries that have expressed reluctance to unwind easy-money monetary policies that have become a feature of global economies in the aftermath of the 2008-2009 financial crisis.
The technical picture and the market internals improved significantly this past week, following two weeks of deterioration.
For the week, the Dow rose +1.6%, making its best weekly gain since Feb. 15th.
Chart services courtesy of stockcharts.com. Annotations by James Taulman.
The Nasdaq rallied +3.8%, its strongest week since Dec. 28th. The tech-centric index broke above resistance of some previous highs which it was turned back from the week prior.
Chart services courtesy of stockcharts.com. Annotations by James Taulman.
The S&P 500 gained +2.9% for the week. Its biggest weekly gain since Nov. 30th. The bellwether had just nearly cleared resistance of its previous highs.
Chart services courtesy of stockcharts.com. Annotations by James Taulman.
As we always say – we let our breakouts be our guide, and we had 2 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 and added 3 new stocks to our weekly watch list.
We now have a total of 6 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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This past week we had 2 breakouts from our weekly watch list of 5 stocks.
Here is an update on all of this week’s breakouts.
| SYM | LAST | ADDED TO WATCH LIST |
BREAKOUT PRICE |
BREAKOUT DATE |
MAX BUY PRICE | CURRENT % GAIN/ LOSS |
| NMIH | $25.73 | 3/10/19 | $25.07 | 3/11/19 | $26.32 | +2.63% |
| O | $71.24 | 3/7/19 | $70.58 | 3/11/19 | $74.11 | +0.94% |
1 – NMI Holdings Inc. (NHMI – Nasdaq)
After first breaking out from our TrendLine SetUps in January, this stock made a considerable run to new all-time highs where it has recently consolidated a bit and built a new base. I then added it to the Technical SetUps WatchList on 3/10 in last Sunday’s report.
Shares broke out Monday morning in fine fashion, with a volume-backed advance as the stock cleared our posted TRIGGER PRICE of $25.07 by 11 AM.
| SYM | LAST | ADDED TO WATCH LIST |
BREAKOUT DATE |
BREAKOUT PRICE |
| NMIH | $25.73 | 3/10/19 | 3/11/19 | $25.07 |
Chart services courtesy of stockcharts.com. Annotations by James Taulman.
| MAX BUY PRICE | 1st SUPPORT |
2nd SUPPORT |
MAX STOP LOSS GUIDE | CURRENT % GAIN/LOSS |
| $26.32 | $25.00 | $24.00 | $23.06 | +2.63% |
Going forward, of course, any above average volume declines would be the first concern.
Initial support is the highs of the previous base at the round-$25.
A break down below there would be a technical violation.
2 – O Realty Income Corp. (O – NYSE)
This stock broke out for us on Monday, although with a lack of conviction as volume was off by -17% that day.
There was some continued follow-through in price on Tuesday, yet again the turnover remained below average.
On Wednesday, there were additional gains at the open, yet those did not hold and be the end of the session shares closed with s slight loss, actually making a negative reversal. Thursday’s gains did little to negate that bearish action as volume continued to lack buy side conviction.
| SYM | LAST | ADDED TO WATCH LIST |
BREAKOUT DATE |
BREAKOUT PRICE |
| O | $71.24 | 3/7/19 | 3/11/19 | $70.58 |
Chart services courtesy of stockcharts.com. Annotations by James Taulman.
| MAX BUY PRICE | 1st SUPPORT |
2nd SUPPORT |
MAX STOP LOSS GUIDE | CURRENT % GAIN/LOSS |
| $74.11 | $70.00 | 50 DMA ($67.69) |
$64.93 | +0.94% |
Add to that, Friday’s above average volume declines which certainly increased our concerns. This stock should be watched closely Monday morning for any continued deterioration.
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