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Momentum is one of the most researched and utilized market phenomena out there. It is simply defined as that which is trading higher is likely to its path higher. And though a simple concept, it is used in some of the largest and most sophisticated investment funds in the world.
There are a number of ways to define momentum, but here I will show you two stocks that have shown strong YTD performance and have compelling technical chart patterns. These signals have positively skewed risk-reward setups from which trades can be carefully measured.
Camping World (CWH - Free Report) and Ryerson (RYI - Free Report) both have Zacks Rank #1 (Strong Buy) ratings and convincing technical chart setups. Additionally, both stocks have far outperformed the market, showing relative strength and signaling upward price momentum.
Image Source: Zacks Investment Research
Camping World
Camping World is a provider of services, protection plans, products, and resources for recreational vehicle enthusiasts. The company's brand consists of Camping World and Good Sam. It offers new and used RVs for sale, vehicle service and maintenance through retail locations and membership clubs.
Camping World stock has built out a prototypical bull flag from which to trade from. Over the last two weeks a tight consolidation has formed between the $31.20 level and the $32.50 level. If the price can move meaningfully above the upper bound of $32.50, the stock should draw in large buyers and trade significantly higher.
Alternatively, if the stock price can’t hold above the $31.20 level, the trade setup is invalidated, and investors should wait for another opportunity.
Image Source: TradingView
Ryerson
Ryerson is a services company that processes and distributes metals. The Company, through its subsidiaries, purchases, processes, and distributes various forms of stainless steel, aluminum, carbon, alloy steel, nickel, and red metals. Ryerson serves several industries including oil and gas, industrial equipment, transportation equipment, heavy equipment and electrical machinery. It has operations primarily in the United States, Mexico, Canada, China, and Brazil.
RYI has experienced significant upgrades in its earnings expectations, reflected by its top Zacks Rank. Current quarter earnings estimates have been revised higher by 2.3% to $1.33 per share, and next quarter earnings estimates have been boosted by a whopping 43% to $1.03 per share. Additionally, FY23 earnings expectations have been upgraded by 16.2% to $4.30 per share.
Image Source: Zacks Investment Research
RYI has built out a bull flag over the last couple of weeks just like CWH. If the price of Ryerson stock can trade above the $43.60 level, it should break out and make new all-time highs in price. However, if the price loses support, and trades below $41.20, investors should look elsewhere, as the trade signal is no longer valid.
Image Source: TradingView
Bottom Line
Traders looking for breakout trades should definitely put some alerts on for Camping World and Ryerson, as they currently have A+ setups. However, even the best trading setups can fail, so investors should be very specific about their trading plans and honor their stops. Picking stocks and identifying breakouts is fun, but the real money is made by respecting uncertainty and being a prudent risk manager.
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2 Top-Ranked Stocks on The Verge of Breaking Out
Momentum is one of the most researched and utilized market phenomena out there. It is simply defined as that which is trading higher is likely to its path higher. And though a simple concept, it is used in some of the largest and most sophisticated investment funds in the world.
There are a number of ways to define momentum, but here I will show you two stocks that have shown strong YTD performance and have compelling technical chart patterns. These signals have positively skewed risk-reward setups from which trades can be carefully measured.
Camping World (CWH - Free Report) and Ryerson (RYI - Free Report) both have Zacks Rank #1 (Strong Buy) ratings and convincing technical chart setups. Additionally, both stocks have far outperformed the market, showing relative strength and signaling upward price momentum.
Image Source: Zacks Investment Research
Camping World
Camping World is a provider of services, protection plans, products, and resources for recreational vehicle enthusiasts. The company's brand consists of Camping World and Good Sam. It offers new and used RVs for sale, vehicle service and maintenance through retail locations and membership clubs.
Camping World stock has built out a prototypical bull flag from which to trade from. Over the last two weeks a tight consolidation has formed between the $31.20 level and the $32.50 level. If the price can move meaningfully above the upper bound of $32.50, the stock should draw in large buyers and trade significantly higher.
Alternatively, if the stock price can’t hold above the $31.20 level, the trade setup is invalidated, and investors should wait for another opportunity.
Image Source: TradingView
Ryerson
Ryerson is a services company that processes and distributes metals. The Company, through its subsidiaries, purchases, processes, and distributes various forms of stainless steel, aluminum, carbon, alloy steel, nickel, and red metals. Ryerson serves several industries including oil and gas, industrial equipment, transportation equipment, heavy equipment and electrical machinery. It has operations primarily in the United States, Mexico, Canada, China, and Brazil.
RYI has experienced significant upgrades in its earnings expectations, reflected by its top Zacks Rank. Current quarter earnings estimates have been revised higher by 2.3% to $1.33 per share, and next quarter earnings estimates have been boosted by a whopping 43% to $1.03 per share. Additionally, FY23 earnings expectations have been upgraded by 16.2% to $4.30 per share.
Image Source: Zacks Investment Research
RYI has built out a bull flag over the last couple of weeks just like CWH. If the price of Ryerson stock can trade above the $43.60 level, it should break out and make new all-time highs in price. However, if the price loses support, and trades below $41.20, investors should look elsewhere, as the trade signal is no longer valid.
Image Source: TradingView
Bottom Line
Traders looking for breakout trades should definitely put some alerts on for Camping World and Ryerson, as they currently have A+ setups. However, even the best trading setups can fail, so investors should be very specific about their trading plans and honor their stops. Picking stocks and identifying breakouts is fun, but the real money is made by respecting uncertainty and being a prudent risk manager.