MDA Breakout Stocks Week 44 – November 2022: Short-Term Picks To Give You An Edge

Introduction

The Weekly Breakout Forecast continues my doctoral research analysis on MDA breakout selections over more than 7 years. This high frequency breakout subset of the different portfolios I regularly analyze has now exceeded 280 weeks of public selections as part of this ongoing live forward-testing research. The frequency of 10%+ returns in a week is averaging over 4x the broad market averages in the past 5+ years.

In 2017, the sample size began with 12 stocks, then 8 stocks in 2018, and at members’ request since 2020, I now generate only 4 selections each week. In addition 2 Dow 30 picks are provided, as well as a new active ETF portfolio that competes against a signal ETF model. Monthly Growth & Dividend MDA breakout stocks continue to beat the market each year as well. I offer 11 top models of short and long-term value and momentum portfolios that have beaten the S&P 500 since my trading studies were made public.

Market Outlook

The Momentum Gauges® have turned the most positive since August 19th and the weekly signals have turned positive for the first time in 8 weeks. The Bank of Japan contributed to the market rebound last week with what may have been the largest QE event in 25 years to fight the record high US dollar.

But the Fed record high QT program continues for October, increasing rates and attracting global fund flows into the US dollar at the highest levels in over 20 years. Volatility in October has jumped to 8 daily events on the S&P 500 greater than +/- 2% at a rate more than double the average volatility events of 3.6 for all the prior months this year. It also corresponds with the Fed conducting the largest QT in October in US history.

We are still in a pattern of bearish rallies in a longer negative channel from November 2021 and the monthly gauges are still negative. There are strong similarities to the volatility and patterns of 2018 and 2008 in the minds of many investors. Follow the Momentum Gauges and be ready for more swift changes.

Momentum Gauges® Stoplight ahead of Week 44. The daily and S&P 500 momentum gauges are positive and the weekly gauges have turned positive for the first time in 8 weeks.

As a reminder much greater detail is covered live every day in the Chat Rooms with current charts and signals. If you are not reviewing the latest charts and updates you could be missing out. The signals are starting to improve but with high volatility as Central Banks are intervening in markets at extremely high levels. The Fed QT in October ($82.3 billion) is the largest in US history and the Bank of Japan QE activity this week is the largest in 25 years, each bank working in opposite directions.

Daily Market Momentum Gauges continue positive from October 21st with the weekly gauges turning positive this week for the first time in 8 weeks.

Current Returns

So far YTD 2022 there are 121 picks in 43 weeks beating the S&P 500. 95 picks are beating the S&P 500 by over 10%+ in double digits. Leading MDA gainers include (NUVL) +74.43%, (MNRL) +37.6%, (RES) +117.1%, (TDW) +179.3%, (CLFD) +98.0%, (VRDN) +55.5%, (WVE) +49.2%, (TA) +72.8%. (COP) 31.8%

Despite such high negative momentum conditions all year, 43 picks in 43 weeks have gained over 10% in less than a week. Additionally, 93 picks in 43 weeks have gained over 5% in less than a week in these high frequency breakout selections. These are highly significant statistical results that are further improved by following the Momentum Gauge signals.

Additional background, measurements, and high frequency breakout records on the Weekly MDA Breakout model is here: Value And Momentum MDA Breakouts +70.5% In 52 Weeks: Final 2021 Year End Report Card

Leveraging the Momentum Gauges with ETFs

In addition to timing MDA breakout stock picks for the best returns, the gauges are used for live ETF bull/bear timing signals with strong results.

Historical Performance Measurements

Historical MDA Breakout minimal buy/hold returns are at +70.5% YTD when trading only in the positive weeks consistent with the positive Momentum Gauges® signals. Remarkably, the frequency streak of 10% gainers within a 4- or 5-day trading week continues at highly statistically significant levels above 80% not counting frequent multiple 10%+ gainers in a single week.

Longer term many of these selections join the V&M Multibagger list now at 107 weekly picks with over 100%+ gains, 44 picks over 200%+, 20 picks over 500%+ and 12 picks with over 1000%+ gains since January 2019 such as:

• Celsius Holdings (CELH) +1,851.5%
• Enphase Energy (ENPH) +2,107.2%
• Intrepid Potash (IPI) +1,227.3%
• Northern Oil and Gas (NOG) +1,161.1%
• Trillium Therapeutics (TRIL) +1008.7%

More than 300 stocks have gained over 10% in a 5-day trading week since this MDA testing began in 2017. A frequency comparison chart is at the end of this article. Readers are cautioned that these are highly volatile stocks that may not be appropriate for achieving your long term investment goals: How to Achieve Optimal Asset Allocation

The Week 44 – 2022 Breakout Stocks for next week are:

The picks for next week consist of 2 Industrial, 1 Energy, 1 Healthcare sector stocks. Energy and Basic Materials are the only positive sectors on the gauges at the close Friday. These stocks are measured from release to members in advance every Friday morning near the open for the best gains. Prior selections may be doing well like NUVL, but for research purposes I deliberately do not duplicate selections from the prior week. These selections are based on MDA characteristics from my research, including strong money flows, positive sentiment, and strong fundamentals — but readers are cautioned to follow the Momentum Gauges® for the best results.

1. Amphastar Pharmaceuticals (AMPH) – Healthcare / Drug Manufacturers
2. Enovix Corp (ENVX) – Industrials / Electrical Equipment & Parts

Amphastar Pharmaceuticals (AMPH) – Healthcare / Drug Manufacturers

Price Target: $42.00/share (See my FAQ #20 on price targets)

Click to enlarge

(Source: Company Resources)

Amphastar Pharmaceuticals, Inc., a bio-pharmaceutical company, develops, manufactures, markets, and sells generic and proprietary injectable, inhalation, and intranasal products in the United States, China, and France. The company operates through two segments, Finished Pharmaceutical Products and API.

Enovix Corp (ENVX) – Industrials / Electrical Equipment & Parts

Price Target: $26.00/share (See my FAQ #20 on price targets)

Click to enlarge

(Source: Company Resources)

Enovix Corporation designs, develops, and manufactures lithium-ion batteries. The company was founded in 2007 and is headquartered in Fremont, California.

Top Dow 30 Stocks to Watch for Week 44

First, be sure to follow the Momentum Gauges® when applying the same MDA breakout model parameters to only 30 stocks on the Dow Index. Conditions have delivered the worst first half to the stock market since 1970. Second, these selections are made without regard to market cap or the below-average volatility typical of mega-cap stocks that may produce good results relative to other Dow 30 stocks. The most recent picks of weekly Dow selections in pairs for the last 5 weeks:

Symbol	Company	Current % return from selection Week
CVX	Chevron Corp.	+6.53%
TRV	Travelers Companies	+5.74%
(JPM)	JPMorgan Chase	+13.39%
(GS)	Goldman Sachs Group	+13.94%
MRK	Merck & Co.	+15.03%
(CVX)	Chevron Corp.	+12.47%
(MRK)	Merck & Co.	+17.01%
(TRV)	Travelers Companies	+18.77%
(MMM)	3M Company	+12.05%
MCD	McDonald’s Corp.	+11.62%

Click to enlarge

If you are looking for a much broader selection of large cap breakout stocks, I recommend these long term portfolios. The new mid-year selections were released to members to start July:

Piotroski-Graham enhanced value –

• July midyear at -0.52%
• January portfolio beating S&P 500 by +35.18% YTD.

Positive Forensic –

• July midyear down -4.92%
• January Positive Forensic beating S&P 500 by +3.62% YTD.

Negative Forensic –

• July midyear down -3.21%
• January Negative Forensic beating S&P 500 by +25.59% YTD

Growth & Dividend Mega cap breakouts –

• July midyear down -2.72%
• January portfolio beating S&P 500 by +10.71% YTD
• New November monthly picks go out Monday

These long term selections are significantly outperforming many major Hedge Funds and all the hedge fund averages since inception. Consider the actively managed ARK Innovation fund down -58.89% YTD, Tiger Global Management -52% YTD.

The Dow pick for next week is:

Intel Corporation (INTC)

Intel reported strong Q3 earnings October 27th with multiple analyst upgrades and a consensus target around $35/share. The technical indicators have turned the most positive in several months with high net MFI inflows for a breakout above the negative channel from March toward 35/share next resistance.

Background on Momentum Breakout Stocks

As I have documented before from my research over the years, these MDA breakout picks were designed as high frequency gainers.

These documented high frequency gains in less than a week continue into 2020 at rates more than four times higher than the average stock market returns against comparable stocks with a minimum $2/share and $100 million market cap. The enhanced gains from further MDA research in 2020 are both larger and more frequent than in previous years in every category. ~ The 2020 MDA Breakout Report Card

The frequency percentages remain very similar to returns documented here on Seeking Alpha since 2017 and at rates that greatly exceed the gains of market returns by 2x and as much as 5x in the case of 5% gains.

The 2021 and 2020 breakout percentages with 4 stocks selected each week.

MDA selections are restricted to stocks above $2/share, $100M market cap, and greater than 100k avg daily volume. Penny stocks well below these minimum levels have been shown to benefit greatly from the model but introduce much more risk and may be distorted by inflows from readers selecting the same micro-cap stocks.

Conclusion

These stocks continue the live forward-testing of the breakout selection algorithms from my doctoral research with continuous enhancements over prior years. These Weekly Breakout picks consist of the shortest duration picks of seven quantitative models I publish from top financial research that also include one-year buy/hold value stocks. Remember to follow the Momentum Gauges® in your investing decisions for the best results.

All the V&M portfolio models are beating the market indices through the worst 6 month start since 1970. New mid-year value portfolios are again leading the major indices to start the next long term buy/hold period.

The final 2021 returns for the different portfolio models from January of last year are shown below.

All the very best to you, stay safe and healthy and have a great week of trading!

JD Henning, PhD, MBA, CFE, CAMS