Week 9 MDA Breakout Stocks – March 2022: Short-Term Picks

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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 reached over 240 weeks of public selections as part of this ongoing live forward-testing research.

In 2017, the sample size began with 12 stocks, then 8 stocks in 2018, and at members’ request since 2020, I now generate 4 selections each week, 2 Dow 30 picks, and new portfolios for ETF/ETNs and monthly Growth & Dividend MDA breakout stocks. 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:

Charts and tables will restart for 2022 when we get at least one positive trading signal week. MDA Breakout returns are still at 0% following the Momentum Gauge® signals and avoiding the worst January start to the stock market since 1939. It is best to follow the signals as we enter March with continuing negative signals and 15 consecutive weeks of negative signals since November.

February is historically the second worst month of the year for the S&P 500 on average since 1927. We still have had no positive MDA buy signals so far in 2022 and last year there were only 21 positive trading weeks to achieve +70.5% returns:

Returns from 21 Weeks of Positive Momentum Gauge signals in 2021

Still waiting for a positive signal in 2022.

VMBreakouts.com

VMBreakouts.com

Momentum Gauge® trading signal: Negative conditions ahead of Week 9

Readers should consider carefully the difference in return performance of momentum stocks over the years while the Momentum Gauges® have high negative values above 40.

VMBreakouts.com

VMBreakouts.com

(Source: VMBreakouts.com) Red weekly color the last 10 weeks shows how poorly market momentum and investor enthusiasm sustains through the week when the negative Momentum Gauges® are above 40. This was an especially strong factor in 2021 showing cumulative returns below with and without the signal.

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VMBreakouts.com

Historical Performance Measurements

The 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 up to 131 weekly picks with over 100%+ gains, 55 picks over 200%+, 18 picks over 500%+ and 3 picks with over 1000%+ gains since January 2019 such as:

  • Intrepid Potash (IPI) +1,421.7%
  • Celsius Holdings (CELH) +1,256.6%
  • 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

2022 Breakout Portfolio Returns

While in negative Momentum Gauge® conditions the current measured returns for 2022 are at 0% by following the signals and avoiding the record market downturns.

The Breakout Picks are high volatility selections for short-term gains, but with no selections below $2/share, under 100k average daily volume, or less than $100 million market cap. Prior returns are documented here:

2022 marks the worst start to the stock market since 2009 and the Momentum Gauge® MDA buy signals have been negative for 15 consecutive weeks since Week 46. It is best to follow the signals and avoid momentum stocks until conditions turn positive.

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VMBreakouts.com

Market Momentum Conditions

The Momentum Gauges® closed at Negative 52 and Positive 44 at high negative levels above 40 — Much safer to wait for high positive levels to return.

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App.VMBreakouts.com

The Weekly Momentum Gauges® based on the broad 7,500+ stocks continue in negative conditions in a longer bearish signal. Negative weekly values remain high and we have had 14 out of the last 15 weeks negative. Like the Daily Momentum Gauges® this smoothed long term chart correlates best with the much broader Russell 2000 index shown in blue on the chart.

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App.VMBreakouts.com

Two conditional signals that are very important to watch:

  • Avoid/Minimize trading when the Negative score is higher than the Positive momentum score.
  • Avoid/Minimize trading when the Negative score is above 40 on the gauge.

The Week 9 – 2022 Breakout Stocks for next week are:

The picks consist of 2 Basic Material, 1 Technology, and 1 Energy stock. 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 including strong money flows, positive sentiment, and fundamentals — but readers are cautioned to follow the Momentum Gauges® for the best results.

  1. Identiv, Inc. (INVE) – Technology / Computer Hardware
  2. Intrepid Potash, Inc. (IPI) – Basic Materials / Agricultural Inputs

Identiv, Inc. (INVE) – Technology / Computer Hardware

FinViz.com

FinViz.com

Price Target: $28.00/share (See my FAQ #20 on price targets)

(Source: FinViz)

Identiv, Inc. operates as a security technology company that secures data, physical places, and things in the Americas, Europe, the Middle East, and the Asia-Pacific. It operates in two segments, Premises and Identity. The Premises segment offers solutions for premises security market, such as access control, video surveillance, analytics, audio, access readers, and identities to government facilities, schools, utilities, hospitals, stores, shops, and apartment buildings.

IPI Data

StockRover.com

Intrepid Potash, Inc. (IPI) – Basic Materials / Agricultural Inputs

IPI chart

FinViz.com

Price Target: $70.00/share (See my FAQ #20 on price targets)

(Source: FinViz)

Intrepid Potash, Inc. produces and sells potash and langbeinite products in the United States and internationally. It operates through three segments: Potash, Trio, and Oilfield Solutions. The Potash segment offers muriate of potash or potassium chloride for use as a fertilizer input in the agricultural market; as a component in drilling and fracturing fluids for oil and gas wells, as well as an input to other industrial processes in the industrial market; and as a nutrient supplement in the animal feed market.

Rover Chart IPI

StockRover.com

Top Dow 30 Stocks to Watch for Week 9

First, be sure to follow the Momentum Gauges® when applying the same MDA breakout model parameters to only 30 stocks on the Dow Index. 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.

While I don’t expect Dow stocks to outperform typical breakout stocks over the measured five-day breakout period, it may provide some strong additional basis for investors to judge future momentum performance for mega-cap stocks in the short- to medium-term. The most recent picks of weekly Dow selections in pairs for the last 5 weeks:

Symbol Company Current % return from selection Week
PG The Procter & Gamble Company -1.04%
(KO) The Coca-Cola Company +0.50%
(DIS) The Walt Disney Co. +0.04%
V Visa, Inc. -2.41%
(GS.PK) Goldman Sachs -4.76%
(CVX) Chevron Corporation +3.31%
(V) Visa, Inc. -0.43%
(AAPL) Apple, Inc. +0.83%
(TRV) The Travelers Companies +4.31%
(PG) The Procter & Gamble Company -3.10%

If you are looking for a much broader selection of mega-cap breakout stocks beyond just 30 Dow stocks with more detailed analysis and strong returns I would recommend the Growth & Dividend MDA Breakout picks.

These picks are released monthly for long term total return with strong returns that are leading the S&P 500 by +10.68% through 2022. The +7.52% average weighted monthly returns do not include the large dividends above 2%+ for every stock. The 2-year returns of the portfolios are shown below:

VMBreakouts.com

VMBreakouts.com

VMBreakouts.com

VMBreakouts.com

The Dow pick for next week is:

Amgen, Inc. (AMGN)

Amgen is rebounding sharply on Friday with earnings beat of February 7th. Insiders are not selling and net MFI inflows are increasing sharply with all the indicators improving and several turning positive on Friday. 230/share is key resistance and a price move back into the positive channel could retest 240/share prior February highs.

AMGN chart

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.

VMBreakouts.com

VMBreakouts.com

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

VMBreakouts.com

VMBreakouts.com

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 portfolio types are beating the S&P 500 that is down -8.0% for 2022. The new active ETF portfolio is up +7.9% YTD or beating the S&P 500 by +15.9% into February.

Annual Returns

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

Annual Returns

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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