|
With over 10,000 stocks to choose from,
tracking the market can be an overwhelming task. You can be adept at
researching the fundamentals and reading the chart movements,
but if you don't have a consistent tracking system in place, it is
difficult to find consistent success. Opportunities will pass you by
or you'll be investing in all the wrong places. The Breakout Tracker is a
custom system built from the ground up designed to alert you to the
highest quality stocks breaking out of sound bases or pulling back to
major support. All stocks are looked at in detail before they ever
make it to the database, guaranteeing you have only a database of the
best. The Breakout Tracker combines the power of the human
element of stock research with the updating, sorting and filtering
capabilities of a dynamic database, alerting you to buying opportunities
in the highest quality stocks in just minutes day.
The goal of this report is to get you familiar
with the data provided in the database.
The Sortable Columns
-
Date Added:
This indicates the date that the stock was first added to the
database OR when the pivot point has been updated. Stocks remain in the database provided they remain above the 200 day moving average.
For example, if a stock was added to the database 6 months ago and then carves out a
new base, the pivot point is updated, the break out date (B/O Date) is
removed, the Technical Rank (T Rank) is updated and the Date Added is
changed to the date when the pivot point is updated.
Sort by this
column to see the latest additions to the database or stocks that have
recently carved out a new base.
Note: During and after earnings season, the database is
reshuffled. New leaders are added, while laggards are deleted.
You may see many stocks added that are well past the pivot point because
they broke out before being considered for the database.
-
Ticker Symbol:
Double clicking the ticker symbol (4)
will take you to the Yahoo Finance page for that company.
A quick way to access the latest news, see analyst estimates, check the
discussion boards, etc. Double click the chart image (2)
to quickly pull up a chart of the company from StockCharts.com
-
Company Name (3):
Hover your mouse over the notepad image to access notes for the company.
The updated date indicates the date that the company's Fundamental Rank
(F Rank), Inst % Change and Earnings Estimates ('05 and '06 Est. %) were
updated (these are updated each quarter after earnings are reported). At this time, the notes
section you see above is also updated to reflect those changes. The notes section includes
brief statements about earnings, sales, margins, ROE, management
ownership as well as a company description.
|
 Search
(1):
Search the entire database by ticker,
company name or industry group. For example, if I want to see how stocks in
the oil industry are doing I can type in "oil" and receive a list of
all oil stocks in the Breakout Tracker. |
-
Industry
-
Current
Price (*Updated
every 15 min.)
-
Price %
Change (*Updated
every 15 min.)
Today's percentage difference
over yesterday's price.
-
Volume %
Change
(*Updated every 15 min.)
The percentage volume change from the 50 day average,
calculated every 15 minutes throughout the trading day. For
example, if a stock normally trades 100K shares an hour into the trading
day (based on the average of the last 50), but today is trading 200K
shares an hour into the trading day, the Volume % Change column will
display 100% in green.
-
Demand Indicators - 20 & 40 Days (DI 20, DI 40):
(*Updated at
end of trading day)
The Demand Indicators measure price and volume movements to gauge
institutional demand. Points are awarded for high volume moves up
(institutional buying) as well as light volume selling (indicating
healthy consolidation). The score decreases with low volume buying
(indicating demand is waning) as well as high volume selling
(institutions dumping shares). The higher the overall score, the
greater demand for the stock.
Note: A score
near zero isn't necessarily a negative. In fact it indicates a
period of consolidation where neither buyers nor sellers are in control.
|
The chart of LLL
over the past couple weeks is characterized by high volume selling
and low volume buying, indicating institutions are not favoring
the stock. As a result, the DI scores are poor.
-18 for the last 20 days and
-16 for the past 40 trading days |
This is a chart showing great
institutional demand with high volume buying (spiking green bars)
and average selling volume. As a result the DI scores are
excellent. 62 over the last 20
days and 63 over the last 40.
|
-
Fundamental Rank (F Rank)
(*Updated
after each earnings report)
Based on a scale of 1 - 30 with 30 indicating stocks with superior fundamentals.
Rank based on sales/earnings growth & consistency, profit
margins,
return on equity, debt level, institutional accumulation & management
ownership.
|
Scoring the
Fundamental Rank (F Rank) - Total Points 30
-
15 points
(Earnings & Sales):
Points based on consistency, size, acceleration and future
estimates of earnings and sales growth
-
10 points
(Margins & ROE):
Points awarded based on health of margins and return on equity,
whether they are increasing/decreasing and how they relate to the
industry average.
-
5 points
(Management & Institutions):
Points awarded for large management ownership (more than 10%) and
for increases in the number of positions initiated by institutions
Check out the tutorial for more information on the
criteria used for finding fundamentally superior companies. |
-
Technical Rank (T Rank)
(*Updated
after a new base is formed)
Based on a scale of 1 - 30 with 30 indicating stocks with an outstanding
base. Rank based on shape/volatility, relative strength and
price/volume movements.
Note: The T Rank only applies to the
original base the stock broke out from and does not reflect the health
of the technical action in the stock after breaking out from the base.
In other words, this IS NOT a continually updated indicator. For
gauging the health of the technical action between bases, you'll need to
consult the Demand Indicators, the Relative Strength Rating and the
relation of the stock to the 50 day moving average.
|
Scoring the
Technical Rank (T Rank) - Total Points 30
-
10
points (Shape & Volatility):
Bases with tight intraday price action and a smooth, shallow base
will score much higher than a base with wide intraday price swings
and a sharp V-like, choppy base
-
10 points
(Price & Volume):
Bases showing decreasing sell volume at the bottom and in the
handle of the base and increasing buy volume in the right side of
the base receive will receive higher scores.
-
10 points
(Relative Strength):
Points awarded according to relative strength - ie. RS Rating of
80 receives 8 points.
For more
information on gauging the health of the chart, see the
Chart Reading tutorial. |
|
Stay away from this
one! Sloppy, volatile action.
T Rank of 21. |
Example of a
technically superior base. Tight price action, good buy volume. T
Rank of 28. |
-
Total Rank (Tot Rank)
Combines the F Rank and T Rank for a total possible score of 60.
-
Relative Strength Rating (RS)
(*Updated at end of trading day)
The relative strength rating (from 1 -100, 100 outperforming all
stocks) compares the performance of a stock to
the performance of all other stocks. The relative strength rating
is very important because history has shown that stocks that have
outperformed in the past tend to do so in the future.
|
Scoring the RS Rating (1 - 100 points)
-
The rating is based on the
percentage of stocks the stock has outperformed over the last year and
over the last 3 months.
-
The rating is weighted so
that a majority of the rating is based on performance in the last 3
months. 40% of the the score comes from a one year comparison and
60% of the score comes from a 3 month comparison.
-
For example, if a stock has
outperformed 75% of the stock universe over the past year and 90% of
stocks in the past 3 months, the RS Rating would be: 75 (.40) + 90 (.60)
= RS of 84.
See the tutorial section
on
Relative Strength. |
-
Earnings Estimates for 2006 and
2007
('06 Est. %, '07 Est. %)
Tracking future earnings estimates gives you an idea of the future
prospects for a company. These columns represent growth estimates
over the prior year.
-
Pivot Point (*Updated after a new base/consolidation has
formed)
The price at which the stock must clear in order to "break
out" of a consolidation (or base). Bases would include flat,
double bottom and cup bases. For more on bases, take a look at the
section titled "Learning the Bases" in the
Chart Reading tutorial.
-
Breakout Date:
The date in which a stock clears its pivot point.
Note: Stocks with no Breakout Date
indicate that the stock has yet to break out.
-
%
Gain From Breakout (% Gain From B/O)
The percentage gain from the pivot (or breakout) point. Remember,
it's important to not chase stocks that are more than 5% from the pivot.
-
%
From the 50/200 Day Moving Average (% From 50DMA/200DMA)
Moving averages are important support and resistance areas to keep an
eye on, specifically the 50 Day Moving Average. Many times,
institutions and professional traders will add shares to their position
at this point. You can follow their lead and profit nicely on a bounce
from this support area. If the trade turns against you and
plummets below support, you are out with a very small loss.
The number in this column is the percentage change from the 50 day
moving average. So, if you see 3.26 (in green), that particular
stock is 3.26% ABOVE the 50 day moving average. Unfortunately,
there is currently no way to indicate whether the stock is rising above
the 50DMA or dropping to meet it. You will need to consult the
chart (by clicking on the chart image next to the ticker) to see which
way the stock is moving. Before making the purchase, make sure the
stock bounces off the 50DMA with good volume. If the stock doesn't
bounce off the 50DMA convincingly during the trading day, wait for a
confirmation of the bounce on the following trading day. This shows the
stock is being supported at this level by the institutions
For more information on purchasing at the 50
day moving average, you may like to check out the "Adding To Your
Position" section of the
Buying Tutorial. The following two examples in APPX and
FINL detail a strategy for buying off the 50 day moving average, which
should always include stocks with good Demand Indicator scores.
|
The chart pattern
has all the characteristics of a perfect play off the 50 day
moving average. Surging buy volume followed by quiet
consolidation to support. Then a bounce off support.
Note the excellent DI scores of 20 and 40 days. |
FINL also provides a
great example of what to look for in a 50 day moving average
strategy. Quiet consolidation leading to a high volume
bounce off support. Will it bounce again? The odds are
good. |
-
Click To View All Stocks
(5)
Displays the entire database
-
Download To Excel
(6)
Clicking here will download the entire database to an excel spreadsheet
Questions?
Feel free to contact support. |