MDA Breakout Stocks Week 10 - March 2023: High-Frequency Gainers To Give You An Edge

Introduction

The Weekly Breakout Forecast continues my doctoral research analysis on MDA breakout selections over more than 8 years. This high frequency breakout subset of the different portfolios I regularly analyze has now reached 300 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 6+ 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 using the MDA methodology, but I highly recommend the monthly Growth & Dividend mega cap breakout portfolios if you are looking for larger cap selections beyond only 30 Dow stocks.

Many more trading strategies, resources, and explanations about the MDA Breakout methodology are available to my investing community.

As long term investors know, you can compound $10,000 into $1 million with 10% annual returns in less than 50 years. This model serves to increase the rate of 10% breakouts into 52 weekly intervals instead of years. In 2022, the worst market since 2008: 113 MDA picks gained over 5%, 52 picks over 10%, 22 picks over 15%, and 13 picks over 20% in less than a week.

2023 Market Outlook

The major indices rebounded at the end of the week continuing the incredible Friday returns as by far the best day of the week YTD. The Momentum Gauge signal turned positive Thursday. Credit for the huge market reversal is being given to Atlanta Fed President Bostic for making statements regarding a pause in interest rates by summer. I have released my latest market outlook article:

V&M Breakout Update - March 3rd: Market Rebounds Ahead Of Next Fed Hike

Largest Market Topping Signal Since August As Fed Considers 50 Bps Rate Hike

My strategy for 2023 is to stay generally bearish while adjusting for any bounces in anticipation of strong similarities to the August topping pattern. Economic data, inflation, manufacturing productivity, home sales, continue to show recessionary weakness into rising interest rate hikes at the highest levels since 2008.

Mid-year 2023 is where things may get interesting with potential for a Fed pivot. Dip-buyers will continue to try to pull this anticipated pivot event forward in time extending high market volatility while the Fed hikes rates. Mid-year I also plan to leverage strong results from a new June Russell Reconstitution anomaly we found last year that is actively tracked on the dashboard: FTSE Russell Reconstitution Anomaly Study - Strong +22.7% Difference After 5 Months

Momentum Gauges Dashboard for Week 10

All the Momentum Gauges turned positive this week in the first positive change in signal since the start of January.

• Guide: Maximizing Market Returns With The Automated Momentum Gauges

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.

Weekly Breakout Returns

The two weekly breakout portfolios are shown below with current 2023 returns. The ongoing competition between the Bounce/Lag Momentum model (from Prof Grant Henning, PhD Statistics) and MDA Breakout picks (from JD Henning, PhD Finance) are shown below with / without using the Momentum Gauge trading signal. The per-week returns equalize the comparison where there were only 16 positive trading weeks last year using the MDA trading signal (negative values below 40).

For 2022, the worst market since 2008: 113 MDA picks gained over 5%, 52 picks over 10%, 22 picks over 15%, and 13 picks over 20% in less than week. These are statistically significant high frequency breakout results despite many shortened holiday weeks.

V&M Multibagger List

While not the purpose of my model, longer term (using the trading video in FAQ #20) many of these selections may join the V&M Multibagger list now at 132 weekly picks with over 100%+ gains, 57 picks over 200%+, 19 picks over 500%+ and 10 weekly picks with over 1000%+ gains since January 2019 such as:

• Celsius Holdings (CELH) +1,916.6%
• Enphase Energy (ENPH) +1,470.2%
• Northern Oil and Gas (NOG) +1,164.0%
• Trillium Therapeutics (TRIL) +1008.7%

More than 450 stocks have gained over 10% in less than a week since this MDA testing began in 2017. Frequency comparison charts are 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

Historical Performance Measurements

Historical MDA Breakout minimal buy/hold (worst case) returns have a compound average growth rate of 30.87% and cumulative minimum returns of +708.19% from 2017. The minimal cumulative returns for 2022 were -0.21%, average cumulative returns were +67.05%, and the best case cumulative returns were +360.25%. The chart reflects the most conservative measurements adding each 52 weekly return in an annual portfolio simulation, though each weekly selection could be compounded weekly.

The Week 10 - 2023 Breakout Stocks for next week are:

The picks for next week consist of 2 Technology, 1 Consumer Defensive and 1 Consumer Cyclical sector stocks. These stocks are up over 4% as 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 -- readers are cautioned to follow the Momentum Gauges for the best results.

1. New Oriental Education (EDU) - Consumer Defensive / Education
2. Superior Industries Intl (SUP) - Consumer Cyclical / Auto Parts

New Oriental Education - Consumer Defensive / Education

Price Target: $52.00/share (Analyst Consensus + Technical See my FAQ #20)

(Source: Company Resources)

New Oriental Education & Technology Group Inc. provides private educational services under the New Oriental brand in the People's Republic of China. The company operates through Educational Services and Test Preparation Courses; Online Education and Other Services; Overseas Study Consulting Services; and Others segments.

Superior Industries Intl - Consumer Cyclical / Auto Parts

Price Target: $9.00/share (Analyst Consensus + Technical See my FAQ #20)

(Source: Company Resources)

Superior Industries International, Inc. designs, manufactures, and sells aluminum wheels to the original equipment manufacturers and aftermarket distributors in North America and Europe. The company supplies aluminum wheels to the automobile and light truck manufacturers. It offers its products under the ATS, RIAL, ALUTEC, and ANZIO brand names.

Top Dow 30 Stocks to Watch for Week 10

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. The most recent picks of weekly Dow selections in pairs for the last 5 weeks:

There has been a rotation in Dow stocks from strong defensive sectors back into technology as investors look for more risk again.

If you are looking for a much broader selection of large cap breakout stocks, I recommend these long term portfolios with consecutive years of beating the S&P 500 and already achieving double-digit returns.

V&M Breakouts: Examining The Best Long Term Value Portfolios For Turbulent Markets

New 2023 Piotroski-Graham enhanced value -

• New January portfolio +17.89% YTD
• 2022 January portfolio beat the S&P 500 by +32.54%

New 2023 Positive Forensic -

• New January portfolio +18.34% YTD
• January 2022 Positive Forensic beat S&P 500 by +6.59%

New 2023 Negative Forensic -

• New January portfolio +13.32% YTD
• January 2022 Negative Forensic beat S&P 500 by +22.18%

New Growth & Dividend Mega cap breakouts -

• New March meg cap portfolio +4.95% YTD not including dividends
• January 2022 portfolio beat S&P 500 by +13.91%

These long term portfolio selections have significantly outperformed many major hedge funds and all the hedge fund averages since inception.

The Dow pick for next week is:

Apple Inc. (AAPL)

Apple is rebounding strongly this week from the lowest levels since January. There is potential for another test of strong resistance at the 157/share level. Insiders and institutions are net sellers in the current quarter, but corporate share buybacks continue and we will see if net MFI inflows turn positive again.

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 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.

All the V&M portfolio models beat the market indices again last year with consistent outperformance of the major indices. All new portfolios are in a strong start to 2023 with many portfolios already in double-digit returns.

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

JD Henning, PhD, MBA, CFE, CAMS

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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