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Futures Off Modestly – 3 Buyable BreakOuts Yesterday

– James F. Taulman, former Editor-in-Chief of the first independently licensed website to offer stock reports and services based on the CAN SLIM® investment system.

7:30 AM – MORNING MARKET UPDATE & WATCH LIST

NOTE: Today’s watch list can be found here.

We had an impressive run yesterday following the midterm elections. The Dow and S&P 500 both gained about +2% and the Nasdaq surged +2.6%, as investors cheered the Democrats taking control of the House.

This morning, Asian markets closed mixed, while major markets in Europe opened about +0.3% higher before losing a little ground.

U.S. futures were modestly higher as of 7:30 AM.

Today, the Fed will announce the result of the two-day meeting and is expected to stick to its plan to raise interest rates in December, and continue hiking rates gradually in 2019.

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Now You Can Start Receiving James’ –
Technical SetUps WatchList Each Market Morning

Early each market morning James diligently screens through hundreds of high EPS and RS ranked stocks that have solid fundamentals.

He is looking for those select few which are setting up in sound technical bases and which looked poised to breakout that day.

Each stock is listed with specific trading criteria such as a TRIGGER PRICE, TRIGGER VOLUME and MAX BUY PRICE.

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As far as earnings,  AMC Entertainment (AMC), Activision Blizzard (ATVI), Crocs (CROX), Gannett (GCI), Walt Disney (DIS), Party City (PRTY), Discovery (DISCA), Dropbox (DBX), Hertz Global Holdings (HTZ), and Yelp (YELP) all report today.

I ran my regular stock screens this morning, yet did not add any new stocks to our watch list.

As stated in the weekend’s Sunday Stock Report – “We could get the start of another rally-run sparked by the results of Tuesday’s mid-terms. Then from there, any breakouts from our watch list would be more prudently buyable.”

We’ve had three buyable breakouts yesterday…

Chart courtesy of stockcharts.com.

Chart courtesy of stockcharts.com.

Chart courtesy of stockcharts.com.

We now have stocks which we will be watching for the next buyable breakout – see here.

One in particular is GMED which actually came within a penny of breaking out yesterday, although volume was only about average.

Chart courtesy of stockcharts.com.

Now you can get access all watch lists with updated trading criteria including –TRIGGER PRICE, TRIGGER VOLUME, and MAX BUY PRICE for every stock here.

Missed any of these morning reports? You can find all previous reports here.

Standard rules apply – any gains above the stock’s TRIGGER PRICE while the day’s volume is at least on pace to make the TRIGGER VOLUME would have any of these set ups confirming a BUY signal up to their MAX BUY PRICE by default.

Keep in mind that when a stock breaks out – becomes potentially buyable – there are other factors to consider.

Volume on the breakout. A stock that is breaking out through resistance, with an increase in volume of +50% above the stock’s average volume (50 DAV), is showing more conviction and more demand. This is not saying – all lower volume breakouts will fail. Actually, we’ve seen many continue higher. If you have found that you did buy a stock that showed lower daily volume or volume under 50%, going forward – simply treat it a regular trade.

Earnings BreakOuts. Many stocks from our watch list will break out during earnings season. Earnings breakouts can be more rewarding, however, these trades carry much more risk then traditional (non-news) breakouts. One needs to also consider – the strength/weakness of the fundamental news that was just released along with the forward-looking guidance the company gave, investors response to the conference call, etc. For anyone who is not familiar with – buying earnings breakouts – I suggest that they sit through a few seasons to study, paper trade, and show some profits, before applying actual capital.

As always, if anyone has any questions – please feel free to email me at james@jamestaulman.com as I would be glad to assist you.