“Stock WatchList: Morning Update”

– 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.

The BreakOut(s) below first appeared in our…
Stock WatchList: Morning Update

NOTE: Before each market open we deliver our watch list of hand-selected, high-ranked stocks with specific buying criteria, know as our “Stock WatchList: Morning Update”. Then, throughout the trading day, we issue BreakOut Alerts via email and text message for any stocks from that watch list which trade above their posted TRIGGER PRICE.

Below is every stock from the daily morning watch list which broke out above their TRIGGER PRICE this past week.

Questions? – Click here.

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.

 Questions? – Click here.

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.

Questions? – Click here.

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WATCH LIST UPDATE:  We now have a total of stocks which we will be watching for a traditional breakout to new highs this coming week.