For Immediate Release
Chicago, IL – February 28, 2019– Stocks in this week’s article include First BanCorp. (FBP - Free Report) , Clearfield, Inc. (CLFD - Free Report) , BioDelivery Sciences International, Inc. (BDSI - Free Report) , MGIC Investment Corp. (MTG - Free Report) and Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) . Kevin Matras screens for companies showing their 'first' profit and explains why they are ones to watch.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
5 Affordable Breakout Stocks for Super Returns
Seeking out breakout stocks is probably one of the most favored techniques among active investors. The logic behind this kind of stock selection is to determine which stocks are trading within a narrow band. These stocks are to be bought as soon as they move above this channel and sold when they fall below. In case a stock moves above this band, it usually gains momentum.
At the same time, market watchers warn against incorrectly timing such a move. This is because there is a significant risk of identifying stock movements as breakouts even when this is not the case. However, when utilized judiciously, this strategy yields formidable gains, which is the reason why it remains popular.
Spotting Prospective Candidates
In order to identify breakout stocks, you must first determine their resistance and support levels. A resistance level is the barrier which must be broken so as to be identified as a breakout stock. Meanwhile, a support level is the floor for the stock’s movement.
At the breakout level, demand for the stock has peaked, making it a natural choice for traders. On the other hand, when a stock hits the support floor, traders are eager to offload it. In order to spot breakout stocks, you would have to see which of these are on the brink of breaking the resistance barrier or those which have just breached this level.
Checking Whether It’s for Real
Stocks that have breached their resistance levels should ideally be in high demand among traders. But the test of whether this is a genuine breakout is when they go on to attain higher prices and the old barrier becomes a new support. This is why it is important to determine whether a long-term price trend is about to emerge.
Only a study of long-term trends can determine whether the existing trading channel has been breached effectively. This indicates the strength of the support or resistance levels. If you can identify the effective channel for a stock, picking it even at a not-so-reasonable price would give you significant returns.
For the rest of this Screen of the Week article please visit Zacks.com at:https://www.zacks.com/stock/news/357040/5-affordable-breakout-stocks-for-superlative-returns
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
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