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Nov 30th:Heavier volume selling featured in all markets. The NASDAQ and NASDAQ 100 escaped relatively unscathed, although the Sox continued to weaken in a manner suggesting further downside for the tech indices. The S&P was similarly lightly wounded, but the Dow had a rougher day, closing at support of the broadening wedge. Falling oil prices (oil failed a test of its 50-day moving average) were not enough to support a market concerned by declining consumer confidence. Weak holiday sales will further dampen consumer spirits, aided by a dollar in freefall, although a here rally should come sooner rather than later. Everybody appears to be looking to Friday before deciding what to do. What this sets up is a tight coil - and once this unravels it will bring about it a substantial move. Below is a sample of Breakout stocks on the move.

Breakout failures: SKO featured on Nov 8th hit its stop. Yesterday's XING didn't get out of the blocks. CBST featured on Nov 24th also hit its stop. Note how all three failed breakouts featured in November - a sign of a tired market.

Breakout targets met: none

Nov 29th: Volume returned, but market direction did not. Investors and traders are likely waiting for the GDP and jobs report before acting. The NASDAQ and NASDAQ 100 traded flat on the day. The Dow eased in early afternoon trading, but rallied into the close - holding support of the broadening wedge. The S&P remained inside its narrow trading range. However, the volatility index is providing a warning for change; the bullish divergence in the CCI is shaping a bottom which will bring some edginess to the markets.

A couple of current gold member plays made continuation moves. PARL featured on September 27th with a price target of $19.34. IIIN broke resistance on heavy volume, the stock featured on September 28th but clipped its stop on the subsequent decline.

Breakout failures: CLFC featured on Nov 17th hit its stop for a 3.8% loss, but ended the day on a bullish hammer. CLE hit its stop after a big gap down, reversing a prior 20% gain for an 8% loss - the stock featured on July 9th.

Breakout targets met: CNR featured on Sep 30th continued its rally to $1 resistance, closing above the price target for a 33% gain. FMC featured on July 29th reached its target for a modest 14% gain. GIGM met its target on Friday for a 32% gain, eventhough the stock closed down today the stock remained over its target price. NG featured on Sep 1st reached its target for a 39% gain. PRM featured on Oct 18th reached its target for a 19% gain. RMBS featured on Nov 15th for a 24% gain.

Nov 28th: Light holiday volume is disguising some toppish action in all markets. This in itself is now bad thing, overbought conditions need to weaken through retracement, or sideways action - the question is where will support kick in? And once it kicks in, will the markets be able to rally to new highs? Looking at the weekly charts we have a breakout in the S&P, but are still waiting for breakouts in the Nasdaq and Dow. Potential upside projections are relatively easy to draw, although in the case of the Nasdaq I would use the former rising channel line as new resistance.

On the stock list, mining stocks gained (especially the silver mining stocks, ie. SIL and SSRI) as the dollar continued its freefall; a point-n-figure target for the dollar index is 77, some 5 points below where it sits now. The point for a rebound will likely coincide with the break of a bearish wedge in silver prices (and a potential bull trap in gold prices). Other stocks to watch on Monday for the bulls include ENWV - prepare for a breakout, GLNG - nice volume buying spikes, IIIN - counterbreaks a breakdown, USU - a bullish pennant below resistance, ERES - breakout after a lengthy decline. For the bears, NT is looking weak on a bearish evening star. Of the member picks DROOY has put in a bullish morning star at support, but technicals remain weak. ELGX - bullish correction complete? Watch for follow through upside tomorrow. OS - break of resistance, but also note bullish break in MACD. Penny junior gold, GSML has bullish merits following Friday's unusual volume. Swing traders can look to penny stock, WLSF.

Breakout failures: none

Breakout targets met: IPSU featured on July 13th closed for a 30% gain. Gold members should note a higher price target (and stop price) for this stock.

Nov 24th: Problem solved with respect to uploading. Holiday trading has left the markets unchanged since last week. I will update on the weekend, but it will be next week's action which will define the true position of the market.

Nov 22nd: I am having problems uploading files to my server from my PC using Dreamweaver MX. The error is "Dreamweaver cannot determine remote server time". From what I understood by Googling is that it relates to the XYIZNWSK in the Dreamweaver .EXE file and how it obtains the time stamp from the server. I edited this from upper to lower case using a HEX editor as some have suggested, but I still have the same problem. I can still pull files onto the server from my PC (hence this message), but this is very tedious - especially as I keep charts in different directories (having to upload from each individual directory). I won't be able to get Macromedia support until after Thanksgiving. If there is anyone who knows what is causing this can they drop me line. Gold members will continue to recieve the daily list, and the breakout page will be updated daily using the tedious method. Market commentary updates will be limited to the Stockchart public list.

Nov 17th: Next update this weekend. My level 2 Chartered Market Technician exam is this Saturday.

Breakout failures: none

Breakout targets met: none

Nov 16th: Profit taking continued, but losses were moderate. Earnings disappointments gave no reasons for the bulls to step in, and are unlikely to do so for another couple of weeks. Some scrappy trading to look forward too.

Breakout failures: BCON featured on Sep 24th, and RCG featured on Oct 25th.

Breakout targets met: none

Nov 15th: Profit taking kept markets in a sideways trading pattern. Days like this will relieve overbought levels and provide opportunities for investors to put their procedes back to work. The only market to made a notable move was the Philly Sox. The market to watch is the S&P. The index ended on a bearish harami cross (one of the more reliable bear signals). There is also a hint of a bearish divergence in the MACD histogram with a stronger bearish divergence developing in on-balance volume. Although gold hobbled to new highs, the mining sector reversed recent strong gains. There are a number of decent short candidates here, including CDE, BGO, HL, and KGC. Oil prices gapped down, but rallied in late afternoon trading. The bearish gap overrules the bullish hammer - but watch for a gap up tomorrow. Oil will take a few weeks to work a base, any bounce from here will be short term.

Breakout failures: none

Breakout targets met: BPO featured on July 12th reached its price target for a 20%, it closed over its stated price target.

Nov 13th: Markets continued to charge up - look at the weekly charts above, each market ended on the very bullish three white soldier pattern. A correction at this point could retreat as far as the open of the second candlestick and still remain bullish in the longer term. For the Dow this could mean a move back to 10,000. This won't be a time for shorts to write blank checks - bullish retracements can slowly kill shorts as downside expectations aren't realised. What about the immediate picture? The NASDAQ and NASDAQ 100 exceeded upper resistance of their channel lines, this marks new breakouts. The upside target is the width of the channel added to the breakout price. This would bring the NASDAQ to 2,150 and the NASDAQ 100 to 1,620. The guiding Sox index closed at new three-and-half months highs, but unlike the broader averages it remains mired in a correction. There needs to be much more upside here before the tech indices can push higher. In the remaining markets, the Russell 2000 is well on its way to its measured bull move to 669. For the Dow we have a target around 11,100 and the S&P to 1,230. All are heavily overbought - but rallies can keep markets overbought long before their corrections set in. Bears will look to the small hammer in the volatility index to spark fear in the markets? This may be so, but it will be a bullish retracement and not a bearish breakdown. Secondary indicators [$BPCOMPQ $NASI, and $NAA50] are firmly in the bullish court. Excellent source reading on their importance can be found here.

The table below shows the returns from successful breakouts as they relate to their Investor Business Daily ranking. I have not expressed the number of successful returns as a proportion of the total number of stocks ranked.

IBD rank

Return (%)

Number of stocks ranked in sector
A
29.48
15
B
36.23
6
C
54.50
2
D
30.55
7
E
34.37
2

Nov 12th: Update to follow. A quick look at my breakout scan shows plenty of extended moves, but very few decent set-ups. As rallies develop different candidates from new sectors breakout as the original movers start to consolidate. This time there are few new breakouts, just old ones revisited.

Breakout failures: IFOX featured on Sep 3rd hit its stop for a 7% loss. LTON featured on Oct 13th is breaking from a base following a gap down - hitting its stop in the process, but higher prices look likely here (potential bullish island reversal if there is a gap up on Monday).

Breakout targets met: APCS featured on Oct 11th reached its target for a 28% gain. CWTR featured on Aug 27th reached its target for a 23% gain. USG featured on Sep 16th reached its target for a 76% gain.

Nov 11th: No updates or breakouts for today. Normal service will be resumed at the weekend.

Nov 10th: We have a fight between the bulls and the bears. The markets have expressed that with some very tight trading. CSCO disappointed, but the markets held up in the morning. Then the Fed mumbled a few words and the markets liked that, then changed their mind and decided they didn't like it. The end result was a flat day, but there was big shift intraday over the last hour of trading. Volume picked up as the majority went with profit taking as the order of the day. The big hit came to the Sox which lost its earlier breakout above its bullish ascending triangle. This wasn't expressed so much in the tech indices [NASDAQ and NASDAQ 100], although today's higher volume will go down as distribution. The Dow couldn't looks an easier shorting opportunity, and because of this I would be very wary of doing so. When things look "obvious" and the crowd reacts as such, it is usually the "crowd" who are wrong. The bigger question is, who is manipulating the markets this way? Perhaps the easiest market to read is the Russell 2000. There is no doubt here about the rally. Corrections are inevitable, but I would be buying this index on a pullback (or member stocks of the index). Remember - small caps lead rallies, large caps are last to react - so don't expect the Dow or S&P to answer your prayers. What of volatility? Its bang on support at the 'extremes' of greed - but 18 isn't zero which means this could drop further - could this trigger a panic buy (ie. a blowout top)? Another reason not to short just yet - but if we do see big gaps and bullish consensus no matter where you turn then can you can start loading up on the puts.

Breakout failures: TVIN featured on Sep 2nd and Aug 24th hits its stop after falling a 3 cents shy of its upside target (the stock was featured at $4.96 and $5.70, ran to $6.71 before retreating to current levels). The stock gapped down today for a respective loss of 14% and 5%. BFLY featured on Nov 8th and gapped down big today.

Breakout targets met: GRA rallied strongly on heavy volume, moving well past its stated price target of $13.95. This was still good enough for a 93% gain. The stock was featured on Aug 27th and again as a gold member play on Aug 17th for a 129% gain. LOJN featured on Sep 1st reached its target for a 19% gain.

Nov 9th: CSCO's earnings did not disappoint as much as they could have, but this didn't prevent a mild AH sell off in the stock. Futures have held up reasonably well, partly offset by stronger GT earnings. Technically, the tech indices [NASDAQ and NASDAQ 100] sit at resistance. The sequence of small real candlestick bodies marks indecision. Bears will be itching to go short, but Bulls will be ready to pounce on a move over June highs - but neither wants to make the first move. The NASDAQ 100 is just over June highs, but remains vulnerable to a bull trap (ie. a close below 1,520 support). Given CSCO earnings I would watch for the bears to attack in force - if they fail to drive prices lower on heavier volume then prepare to back up the truck. The Russell 2000 and S&P are well above June highs and a correction in these indices should find support here. The Dow is the most interesting market to watch over the coming days. It experienced the fastest of rallies, similar to that of March - but is now stuck at September resistance. If you take a glance at the Dow in March you will see what happened in the weeks that followed.

Breakout failures: YPNT featured on Oct 21st.

Breakout targets met: none

Nov 8th: Markets starting to churn at resistance. Fed comments and CSCO earnings this week likely to weigh heavily, when is the last time CSCO reported good news for the market?

Breakout failures: TGC featured on Oct 14th hit its stop - but ended the day on a bullish doji. WITS featured on Sep 20th hit its stop for a 12.64% loss.

Breakout targets met: CDIS featured on Sep 27th reached target for a 17.87% gain. FHRX featured on Sep 13th reached its target for a 28% gain. LSTR featured on Oct 15th reached its target for a 14% gain. OLG featured on June 9th reached its target for a 53% gain.

Nov 5th: The Dow joined the party and broke from its own channel downtrend but stopped right on resistance of the September reaction high. Similarly, the tech indices [NASDAQ and NASDAQ 100] sit at resistance of a rising channel off August lows. The Sox remains relatively lacklustre compared to the rate of ascent in the tech averages - simply compare the level of the Sox now to that in September and you will see how much work needs to be done to bring things even with the NASDAQ and NASDAQ 100. Given the extent of the bullish momentum over the last couple of weeks it would perhaps be prudent to take (some) profits off the table with the intention of jumping back in once new yearly highs are made. One index that does qualify in this regard is the S&P. But even here the rally from 1,090 to 1,166 needs a breather so watch for pullback opportunities in S&P member stocks.

Value players should look to some of the metal stocks, GSS in particular looks reasonable at near term support. Consolidation breakouts in PAAS and HL could be worth a punt. On the fallondpicks.com list keep an eye on BEAV as it works towards resistance - some nice buying here. CETV looks a definite sell and potential short sale based on erratic trading on high volume. CSTR sits at resistance of a broadening wedge - its close to a break of $27.50 but there are reasons to sell too. IBAS will soon break $2.70 resistance, continuing a long standing rally. Keep JSDA on the watch list for a bullish flag break. Short players may want to take a look at HURC - the last four days of trading have been weak. Lovers of SBAC should watch for a break of $8.45; buyers and sellers are fighting it out on declining volume just below $10 resistance, who will win? USU has broken a triangular consolidation on higher volume with improving technicals, looks a good buy for this breakout play. GRA lies a few pennies short of our price objective, one of the best performers on my list, it first featured on June 4th at $3.87, and again on Aug 27th at $7.24. SIMG is another stock on the verge of a breakout. SNIC took a dive after weeks of steady advance - time to sell. QCOM looks another potential short candidate, a big island reversal left in its wake.

Nov 4th: Breakouts in S&P following the Russell 2000 yesterday. Bearish candlesticks in NASDAQ and NASDAQ 100 negated, but not quite the breakout yet. The Dow is on the verge of a breakout of its own.

Breakout failures: ASTM featured on Oct 21st. AUDC featured on Sep 14th, and Nov 2nd. PXT featured on Nov 1st.

Breakout targets met: PFCB featured on Sep 30th hit its target for a modest 11% gain.

Nov 3rd: Bush victory brought what the market wanted, but ended up "selling on the news". The tech indices suffered most, both NASDAQ and NASDAQ 100 closing on bearish black candlesticks on higher volume. Larger caps gained on the GOP victory, both S&P and Dow closing up, the former index closing above near term resistance but still a few points short of the last reaction high in June. Should 1,146 break in the S&P then I would expect the tech indices to soon follow (and eventually the Dow). New rallies are lead by small caps and the Russell 2000 did not disappoint as it comprehensively sliced past resistance. The seeds have been sown, we now need the rain to fuel their growth. Watch for breakout leaders over the coming days.

Breakout failures: AXYX featured on Oct 19th closed for a 10% loss. PSTI featured on Oct 8th closed for a 5% loss. KOOL featured on Oct 26th hit its stop for a 3% loss.

Breakout targets met: KOSP featured on Aug 6th closed for a 26% gain. SBAC featured on Aug 2nd is well above its price target for a 68% gain. TRGL featured on Sep 27th reached its target for a 27% gain.

Nov 2nd: The election ball is off and rolling and the markets experienced the 'what ifs' from both sides of the coin. Continued enthusiasm for a Bush victory pushed markets higher before rumors of a potential Kerry victory in Ohio sent markets crashing in late day trading. Irrespective of who wins it will be the fact that someone wins which will fuel the next rally. Rapid losses from a (surprising) Kerry victory should be viewed as an excellent buying opportunity. Bullish corrections involve short, sharp shocks, similar to what we saw today. I would look for the correction to last 1-3 weeks before the big bounce (and an end to the year long congestion) begins. The NASDAQ and NASDAQ 100 remained resilient, with an intermediate bullish trend still in place. The NASDAQ 100 is closest to ending the almost year long decline so it should not be surpising to see weakness as resistance is tested. The Philly Sox underscores the strength in the tech averages. The Sox's MACD trigger line breached resistance and sits at new 6-month highs, as its ADX rises in confirmation. The S&P continues to pressure resistance while the Dow still fumbles for a bottom. The volatility index could provide the biggest clue as to what will happen over the coming days as it looks primed for a sharp rally, the spike in fear may run in conjuction with a Kerry victory. Where can value be found? Look to the small caps - a potential cup-and-handle pattern is developing, look for leaders in members of the Russell 2000 index.

Breakout failures: COPY featured on Oct 5th. NTGR featured on Oct 29th. DJTC featured on Oct 26th.

Breakout targets met: none

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