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3 Breakout Stocks to Watch for Superb Returns

·12 min read

Breakout stocks are being chosen by active investors for stellar returns. In other words, the active investing approach involves searching for stocks whose prices are fluctuating within a specific band. It’s prudent to offload the stock if it falls below the lower bound of this band. Similarly, once the stock breaks above this channel, it has all the chance of delivering strong gains.

Zeroing in on Breakout Stocks

In order to select the right breakout stock, one has first to calculate its support and resistance level. A support level is the lower bound for stock movements, while a resistance level refers to the maximum price it trades within a considerable period.

In other words, the demand for a stock is at its lowest at its support level, which means that most traders are willing to sell it. At the resistance level, most traders are willing to go long on the stock, meaning that they would like to add them to their portfolio.

The key to identifying breakout stocks is to zero in on those on the verge of a breakout or those that have just broken above the resistance level.

Has a Genuine Breakout Occurred?

The primary risk associated with such a strategy is that the decision to buy an apparent breakout candidate has been incorrectly timed. When a stock moves above the resistance level, it should be a highly prized commodity for traders. However, whether such a breakout is genuine is another matter altogether.

For a bona fide breakout, the stock’s earlier resistance barrier should become its new support level. This only happens if the trading channel that has been established is tested by observing long-term price trends. The strength of the support and resistance levels can be ascertained only through such a study. Despite the risk of misidentification, correctly identifying such stocks can yield considerable returns, even at a price that may not seem attractive at first glance.

Screening Criteria

Percentage price change over four weeks between 10% and 20% (Stocks showing considerable price increases but whose gains are not excessive.)

Current Price /52-Week High greater than or equal to 0.9 (Stocks trading 90% close to their 52-week highs.)

Zacks Rank less than or equal to #3 (Only Strong Buy, Buy and Hold rated stocks can get through.)

No matter whether the market is good or bad, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.

Beta for 60 months less than or equal to 2

(Stocks which move by a greater degree than the broader market but within a reasonable limit.)

Current price less than or equal to $20 (Stocks reasonably priced.)

These criteria narrow down the universe of more than 6,853 stocks to only three. Here’re the stocks:

Northeast Community Bancorp NECB is a federally chartered stock-holding company established to be the holding company for Northeast Community Bank. Currently, Northeast Community Bancorp carries a Zacks Rank #3. NECB has an expected earnings growth rate of 48% for the current year.

Cyxtera Technologies CYXT provides data center colocation and interconnection services. Currently, Cyxtera Technologies carries a Zacks Rank #3. CYXT has an expected earnings growth rate of 32.8% for the current year.

Firstgroup FGROY provides passenger transport services primarily in the UK and North America. Currently, Firstgroup carries a Zacks Rank #2. FGROY has an expected earnings growth rate of 300% for the current year.

You sign up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and backtest them first before taking the investment plunge.

The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

Click here to sign up for a free trial to the Research Wizard today.

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.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.

3 Breakout Stocks to Watch for Superb Returns

Teaser: Northeast Community Bancorp (NECB), Cyxtera Technologies (CYXT) & Firstgroup (FGROY) have been selected as the breakout stocks for today.

Breakout stocks are being chosen by active investors for stellar returns. In other words, the active investing approach involves searching for stocks whose prices are fluctuating within a specific band. It’s prudent to offload the stock if it falls below the lower bound of this band. Similarly, once the stock breaks above this channel, it has all the chance of delivering strong gains.

Zeroing in on Breakout Stocks

In order to select the right breakout stock, one has first to calculate its support and resistance level. A support level is the lower bound for stock movements, while a resistance level refers to the maximum price it trades within a considerable period.

In other words, the demand for a stock is at its lowest at its support level, which means that most traders are willing to sell it. At the resistance level, most traders are willing to go long on the stock, meaning that they would like to add them to their portfolio. The key to identifying breakout stocks is to zero in on those on the verge of a breakout or those that have just broken above the resistance level.

Has a Genuine Breakout Occurred?

The primary risk associated with such a strategy is that the decision to buy an apparent breakout candidate has been incorrectly timed. When a stock moves above the resistance level, it should be a highly prized commodity for traders. However, whether such a breakout is genuine is another matter altogether.

For a bona fide breakout, the stock’s earlier resistance barrier should become its new support level. This only happens if the trading channel that has been established is tested by observing long-term price trends. The strength of the support and resistance levels can be ascertained only through such a study. Despite the risk of misidentification, correctly identifying such stocks can yield considerable returns, even at a price that may not seem attractive at first glance.

Screening Criteria

• Percentage price change over four weeks between 10% and 20% (Stocks showing considerable price increases but whose gains are not excessive.)

• Current Price /52-Week High greater than or equal to 0.9 (Stocks trading 90% close to their 52-week highs.)

• Zacks Rank less than or equal to #3 (Only Strong Buy, Buy and Hold rated stocks can get through.)

No matter whether the market is good or bad, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.

• Beta for 60 months less than or equal to 2

(Stocks which move by a greater degree than the broader market but within a reasonable limit.)

• Current price less than or equal to $20 (Stocks reasonably priced.)

These criteria narrow down the universe of more than 6,853 stocks to only three. Here’re the stocks:

Northeast Community Bancorp (NECB) is a federally chartered stock-holding company established to be the holding company for Northeast Community Bank. Currently, Northeast Community Bancorp carries a Zacks Rank #3. NECB has an expected earnings growth rate of 48% for the current year.

Cyxtera Technologies (CYXT) provides data center colocation and interconnection services. Currently, Cyxtera Technologies carries a Zacks Rank #3. CYXT has an expected earnings growth rate of 32.8% for the current year.

Firstgroup (FGROY) provides passenger transport services primarily in the UK and North America. Currently, Firstgroup carries a Zacks Rank #2. FGROY has an expected earnings growth rate of 300% for the current year.

You sign up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and backtest them first before taking the investment plunge.

The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

Click here to sign up for a free trial to the Research Wizard today.

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.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.

 

3 Breakout Stocks to Watch for Superb Returns

Teaser: Northeast Community Bancorp (NECB), Cyxtera Technologies (CYXT) & Firstgroup (FGROY) have been selected as the breakout stocks for today.

Breakout stocks are being chosen by active investors for stellar returns. In other words, the active investing approach involves searching for stocks whose prices are fluctuating within a specific band. It’s prudent to offload the stock if it falls below the lower bound of this band. Similarly, once the stock breaks above this channel, it has all the chance of delivering strong gains.

Zeroing in on Breakout Stocks

In order to select the right breakout stock, one has first to calculate its support and resistance level. A support level is the lower bound for stock movements, while a resistance level refers to the maximum price it trades within a considerable period.

In other words, the demand for a stock is at its lowest at its support level, which means that most traders are willing to sell it. At the resistance level, most traders are willing to go long on the stock, meaning that they would like to add them to their portfolio. The key to identifying breakout stocks is to zero in on those on the verge of a breakout or those that have just broken above the resistance level.

Has a Genuine Breakout Occurred?

The primary risk associated with such a strategy is that the decision to buy an apparent breakout candidate has been incorrectly timed. When a stock moves above the resistance level, it should be a highly prized commodity for traders. However, whether such a breakout is genuine is another matter altogether.

For a bona fide breakout, the stock’s earlier resistance barrier should become its new support level. This only happens if the trading channel that has been established is tested by observing long-term price trends. The strength of the support and resistance levels can be ascertained only through such a study. Despite the risk of misidentification, correctly identifying such stocks can yield considerable returns, even at a price that may not seem attractive at first glance.

Screening Criteria

• Percentage price change over four weeks between 10% and 20% (Stocks showing considerable price increases but whose gains are not excessive.)

• Current Price /52-Week High greater than or equal to 0.9 (Stocks trading 90% close to their 52-week highs.)

• Zacks Rank less than or equal to #3 (Only Strong Buy, Buy and Hold rated stocks can get through.)

No matter whether the market is good or bad, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.

• Beta for 60 months less than or equal to 2

(Stocks which move by a greater degree than the broader market but within a reasonable limit.)

• Current price less than or equal to $20 (Stocks reasonably priced.)

These criteria narrow down the universe of more than 6,853 stocks to only three. Here’re the stocks:

Northeast Community Bancorp (NECB) is a federally chartered stock-holding company established to be the holding company for Northeast Community Bank. Currently, Northeast Community Bancorp carries a Zacks Rank #3. NECB has an expected earnings growth rate of 48% for the current year.

Cyxtera Technologies (CYXT) provides data center colocation and interconnection services. Currently, Cyxtera Technologies carries a Zacks Rank #3. CYXT has an expected earnings growth rate of 32.8% for the current year.

Firstgroup (FGROY) provides passenger transport services primarily in the UK and North America. Currently, Firstgroup carries a Zacks Rank #2. FGROY has an expected earnings growth rate of 300% for the current year.

You sign up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and backtest them first before taking the investment plunge.

The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

Click here to sign up for a free trial to the Research Wizard today.

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.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.


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