For Immediate Release
Chicago, IL – June 21, 2019 - Stocks in this week’s article are Avon Products, Inc. AVP, Hallmark Financial Services, Inc. HALL, DHI Group, Inc. DHX, Anglo American plc NGLOY and Toray Industries, Inc. TRYIY.
5 Bargain Breakout Stocks for Superlative Returns
Selecting breakout stocks is probably one of the most favored techniques among active investors. The idea behind this kind of stock selection is to determine stocks that are trading within a narrow channel. These stocks are to be bought as soon as they move above this band and sold when they fall below. In case a stock moves above this band, it usually gains momentum.
Spotting a Breakout Stock
The first step to selecting the right breakout stock is 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 which it trades within over a considerable period.
In other words, the demand for a stock is at its lowest at its support level, which means most traders are willing to sell it. At the resistance level, most traders are willing to go long on the stock, which means that they would like to add them to their portfolios. The key to identifying breakout stocks is to zero in on those that are on the verge of a breakout or those that have just broken above the resistance level.
Identifying Whether It’s for Real
Stocks which have breached their resistance level should ideally be in high demand among traders. But the test of whether this is a genuine breakout is whether 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.
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DHI Group, Inc. (DHX) : Free Stock Analysis Report
Avon Products, Inc. (AVP) : Free Stock Analysis Report
Hallmark Financial Services, Inc. (HALL) : Free Stock Analysis Report
Toray Industries Inc. (TRYIY) : Free Stock Analysis Report
ANGLO AMER ADR (NGLOY) : Free Stock Analysis Report
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