MDA Breakout Stocks Week 43 – October 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 provide 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® are signaling a mixed market ahead. Conditions starting to turn more positive on the daily gauges, and nearly positive on the weekly gauges after negative signals the past 8 weeks. The Bank of Japan contributed to the market rebound on Friday with what may have been their largest QE event in 25 years to fight the record high US dollar and record Federal Reserve intervention.

BUT the Fed record high QT program continues into October increasing rates and attracting global fund flows into the US dollar at the highest levels in over 20 years. My 2022 forecast continues with correctly calling September the worst month of the year on average since 1927 with added pressure from the ongoing doubling on Fed quantitative tightening. The S&P 500 touched on my long-term target at 3500 and will continue to test this lower support for as long as the Fed QT program continues. October follows strong similarities to a very negative October back in 2018, our last year with Fed QT.

Consider the AAPL, TMV, UTSL, FNGU charts as excellent validating indicators to the Momentum Gauges:

Momentum Gauges® Stoplight ahead of Week 43. The daily Market and S&P 500 momentum gauges have turned positive but led only by positive Energy and Basic Material sectors so far. If the Basic Material rally is from the large US Dollar drop on record BoJ QE activity it could be short lived.

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 ($59.3 billion) is the largest monthly liquidity drain in US history and the Bank of Japan QE activity on Friday may be their largest in 25 years, both working in opposite directions.

Weekly Market Momentum Gauges continue negative through an 8th week on the 2-year chart shown below from the 2020 Covid correction, but very close to confirming a new positive weekly signal.

Current Breakout Returns

So far YTD 2022 there are 108 picks in 42 weeks beating the S&P 500. 89 picks are beating the S&P 500 by over 10%+ in double digits. Leading MDA gainers include (MNRL) +37.6%, (RES) +95.4%, (TDW) +149.9%, (CLFD) +71.3%, (VRDN) +55.4%, (WVE) +54.8%, (TA) +55.2%. (COP) 29%

Despite such high negative momentum conditions all year, 41 picks in 42 weeks have gained over 10% in less than a week. Additionally, 90 picks in 42 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.

2022 First-half weekly return results

First half returns with all the weekly returns available on the V&M Dashboard

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.

Longer term many of these selections join the V&M Multibagger list now at 102 weekly picks with over 100%+ gains, 39 picks over 200%+, 18 picks over 500%+ and 12 picks with over 1000%+ gains since January 2019 such as:

• Celsius Holdings (CELH) +1722.5%
• Enphase Energy (ENPH) +1,722.1%
• Intrepid Potash (IPI) +1,240.2%
• Northern Oil and Gas (NOG) +1,091.4%
• 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 43 – 2022 Breakout Stocks for next week are:

The picks for next week consist of 2 Energy, 1 Basic Material, 1 Technology 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, 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. MAG Silver Corp (MAG) – Basic Materials / Silver
2. VIZIO Holding Corp (VZIO) – Technology / Consumer Electronics

MAG Silver Corp – Basic Materials / Silver

Price Target: $16.00/share (See my FAQ #20 on price targets)

Click to enlarge

(Source: Company Resources)

MAG Silver Corp. engages in the exploration and development of precious metal mining properties. The company explores for silver, gold, lead, and zinc deposits. It primarily holds 44% interest in the Juanicipio project located in the Fresnillo District, Zacatecas State, Mexico.

VIZIO Holding Corp – Technology / Consumer Electronics

Price Target: $16.00/share (See my FAQ #20 on price targets)

Click to enlarge

(Source: Company Resources)

VIZIO Holding Corp., through its subsidiaries, provides smart televisions, sound bars, and accessories in the United States. It also operates Platform+ that comprises SmartCast, a Smart TV operating system, enabling integrated home entertainment solution, and data intelligence and services products through Inscape. Its SmartCast delivers content and applications through an easy-to-use interface, as well as supports streaming apps, such as Amazon Prime Video, Apple TV+, Discovery+, Disney+, HBO Max, Hulu, Netflix, Paramount+, Peacock, and YouTube TV and hosts its free ad-supported video app, WatchFree, and VIZIO Free channels.

Top Dow 30 Stocks to Watch for Week 43

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
(JPM)	JPMorgan Chase	+9.93%
(GS)	Goldman Sachs Group	+8.37%
MRK	Merck & Co.	+9.21%
(CVX)	Chevron Corp.	+8.22%
(MRK)	Merck & Co.	+11.09%
(TRV)	Travelers Companies	+15.03%
(MMM)	3M Company	+3.38%
MCD	McDonald’s Corp.	+3.50%
(JNJ)	Johnson & Johnson	+1.85%
(MCD)	McDonald’s Corp.	+3.50%

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 up +0.17%
• January portfolio beating S&P 500 by +34.78% YTD.

Positive Forensic –

• July midyear down -14.11%
• January Positive Forensic beating S&P 500 by +3.34% YTD.

Negative Forensic –

• July midyear down -2.81%
• January Negative Forensic beating S&P 500 by +24.91% YTD

Growth & Dividend Mega cap breakouts –

• July midyear down -7.99%
• January portfolio beating S&P 500 by +10.46% YTD

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 -64.07% YTD, Tiger Global Management -52% YTD.

The Dow Pick For Next Week Is:

The Travelers Companies (TRV)

The Travelers continues as strong prior breakout for October up 15% from last selection and clearing prior August resistance levels. Q3 earnings Oct 19th beat on sales and earnings with high net MFI inflows and continued institutional buying for the quarter in a strong positive sign toward a retest of prior highs around 185/share.

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 frequency 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