Week 30 MDA Breakout Stocks – July 2022: Short-Term Picks To Give You An Edge

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Introduction

The Weekly Breakout Forecast continues my doctoral research analysis on MDA breakout selections over more than 7 years. This subset of the different portfolios I regularly analyze has now exceeded 260 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 S&P 500 since my trading studies were made public.

Market Outlook

The Momentum Gauges®, economic events, and weekly market outlook are now separated into a new weekly article here which also includes my new weekly Technical Market update videos.

Momentum Gauge® stoplight signals

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Current Returns

In a quick study of the MDA breakout selections YTD there are 68 picks in 29 weeks beating the S&P 500. 42 picks are beating the S&P 500 by over 10%. Leading gainers +58.3% (TDW), +35.3% (RES), +15.1% (WVE), and +26.6% (CLFD) are significantly beating the major indices YTD.

Investing.com

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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

Momentum Gauge® trading signal: Positive conditions ahead of Week 30

2022 First-half weekly return results

The new weekly returns for Q3 will be posted soon.

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Red weekly color indicates negative Market Momentum Gauge signals. MDA breakout selections outperform when the market signal is positive and daily negative values are below 40 level.

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.

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Longer term many of these selections join the V&M Multibagger list now at 92 weekly picks with over 100%+ gains, 40 picks over 200%+, 18 picks over 500%+ and 11 picks with over 1000%+ gains since January 2019 such as:

  • Celsius Holdings (CELH) +1,602.8%
  • Enphase Energy (ENPH) +1,429.6%
  • Intrepid Potash (IPI) +1,082.4%
  • Houghton Mifflin Harcourt (HMHC) +1479.5%
  • Trillium Therapeutics (TRIL) +1008.7%

More than 200 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 30 – 2022 Breakout Stocks for next week are:

The picks for next week consist of 1 Energy, 1 Technology, 1 Consumer Cyclical and 1 Basic Materials sector stocks. These stocks are released to members in advance every Friday morning near the open. Prior selections may be doing well, 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. Instructure Holdings (INST) – Technology / Software – Application
  2. TimkenSteel Corp (TMST) – Basic Materials / Steel

Instructure Holdings (INST) – Technology / Software – Application

FinViz.com

Price Target: $30.00/share (See my FAQ #20 on price targets)

(Source: Company Resources)

Instructure Holdings, Inc. provides cloud-based learning, assessment, development, and engagement systems worldwide. It offers Canvas Learning Management System that includes assessments, analytics, and learning content for K-12 and higher education institutions; Canvas Studio, an online video platform; Canvas Catalog, a course catalog and registration system; Canvas Assessment, a solution for assessments that include MasteryConnect, a robust student assessment management system, and Certica, which provides assessment content solutions and analytics to inform daily instruction in the classroom and data; Canvas Network that allows access to open online courses; Impact that helps K-12 and higher education institutions to improve technology adoption and evaluate impact of educational technology; and Elevate Data Sync, a solution that allows edtech vendors to share learning data between K-12 and higher education applications.

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TimkenSteel Corp (TMST) – Basic Materials / Steel

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Price Target: $24.00/share (See my FAQ #20 on price targets)

(Source: Company Resources)

TimkenSteel Corporation manufactures and sells alloy steel, and carbon and micro-alloy steel products in the United States and internationally. It offers carbon, micro-alloy, and alloy steel ingots, bars, tubes, and billets, as well as supplies machining and thermal treatment services. The company’s products are used in gears; hubs; axles; crankshafts and connecting rods; oil country drill pipes; bits and collars; bearing races and rolling elements; bushings; fuel injectors; wind energy shafts; anti-friction bearings; and other applications.

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Top Dow 30 Stocks to Watch for Week 30

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
(UNH) UnitedHealth Group +0.32% Reported Q2 – July 15th
(AXP) American Express +9.14% Reported Q2 – July 22nd
(WMT) Walmart +2.53%
(TRV) The Travelers Companies -8.05% Reported Q2 – July 21
KO Coca Cola -2.59% Reports Q2 – July 26
(PG) Procter & Gamble -1.45% Reports Q2 – July 29
(GS) Goldman Sachs +11.39% Reported Q2 – July 18
(NKE) Nike -0.91%
(KO) Coca Cola +3.63%% Reports Q2 – July 26
(CSCO) Cisco Systems +2.47%

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

Piotroski-Graham enhanced value

  • July up +9.94%
  • January portfolio beating S&P 500 by +20.99% YTD.

Positive Forensic

  • July up +3.63%
  • January Positive Forensic beating S&P 500 by +2.42% YTD.

Negative Forensic

  • July up +14.66%
  • January Negative Forensic beating S&P 500 by +11.14% YTD

Growth & Dividend Mega cap breakouts

  • July down -5.72%
  • January portfolio beating S&P 500 by +7.86% YTD

These long term selections are significantly outperforming major Hedge Funds and all the hedge fund averages since inception. Consider the actively managed ARK Innovation fund down -56.4% YTD, Tiger Global Management -52% YTD, RTW Investment Group -34% YTD.

The Dow pick for next week is:

Honeywell International (HON)

Honeywell is in early breakout conditions with all the sentiment and money flow indicators turning positive this week ahead of earnings July 28th. Analysts including BofA Securities have increased ratings in July to Buy with a $210/share price target. Net MFI inflows have increased sharply ahead of earnings and the stock as a 2.16% dividend yield.

FinViz.com

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.

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

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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.

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

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

JD Henning, PhD, MBA, CFE, CAMS