6/10 Top Prospects

Nine breakouts beyond the 55-day price channel among the 300+ stocks and exchange trade funds I screened, including the China fund (FXI0 and the Nasdaq 100 (QQQ). One breakout has a strong trend.

Strong-trend Breakouts

sym	phase	adx	bday	blevel	stop	atr	atr%
NYX		28	jun10	$34.37	$34.97	0.60	1.8%

Exchange-traded funds are marked with a plus sign (+) after the ticker symbol. My holdings are marked with an asterisk (*).

I’m neutral to slightly bearish on the NYX financials.

Weak-trend Breakouts

sym	phase	adx	bday	blevel	stop	atr	atr%
AUY		21	jun10	$11.62	$11.98	0.36	3.1%
CHIE+		21	jun10	$15.92	$16.24	0.32	2.0%
EWW+		18	jun10	$59.15	$60.07	0.92	1.6%
FXI+		14	jun10	$42.68	$43.43	0.75	1.8%
HBC		20	jun10	$50.28	$50.97	0.74	1.5%
NE		15	jun10	$39.02	$40.08	1.06	2.7%
QQQ+		22	jun10	$54.82	$55.54	0.72	1.3%
SMH+		24	jun10	$33.29	$33.90	0.61	1.8%

Exchange-traded funds are marked with a plus sign (+) after the ticker symbol. My holdings are marked with an asterisk (*).

CHIE -- the fund that tracks the China energy sector -- trades on extremely low volume.

DIA -- the fund tracking the Dow Jones Industrial Average -- is within 1¢ of a breakout to the bearside, and MGM is within 2¢. MGM has a strong trend.

Here's what the analysis will look like if they break through today:

sym	phase	adx	bday	blevel	stop	atr	atr%
DIA+		23	jun10	$119.44	$122.07	1.33	1.1%
MGM		25	jun10	$12.41	$12.99	0.58	4.7%

Key

• phase: Green for a bull-phase breakout, red for a bear phase.
• adx: Average direction index location, indicating the strength, or the temperature, of the trend. Orange for 40 or greater, aqua (light blue) for 25 and up but below 40, magenta (light purple) for 20 and up but below 25, and brown for anything below 20. (Mnemonic: Orange for the overhead sun, blue for the surrounding sky, magenta for sunset on the horizon and brown for the earth.)
• bday: Breakout day, the day the price broke through the upper or lower 55-day price line.
• blevel: Breakout level, the price level of the line that was broken through.
• bstop: The stop/loss price calculated on breakout days as the 14-day average true range below the breakout-day low for a bull phase and above thre breakout-day high for a bear phase.
• atr: The 14-day average true range, in the same currency as the price.
• atr%: The average true range as a percentage of the breakout level, an indicator of volatility that is comparable for all potential trades.

About channel analysis

Read a detailed explanation of my channel analysis method, including trading rules.