Zacks.com featured highlights include Phathom Pharmaceuticals, Universal Stainless & Alloy Products and Arlo Technologies
For Immediate Release
Chicago, IL – July 10, 2023 – Stocks in this week’s article are Phathom Pharmaceuticals PHAT, Universal Stainless & Alloy Products USAP and Arlo Technologies ARLO.
3 Top Breakout Stocks Worth a Buy for Attractive Returns
Picking breakout stocks, or in other words, searching for stocks whose prices are fluctuating within a specific band, is an active investing approach. 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
To select the right breakout stock, one has to first 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 at which it trades over 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 they would like to add them to their portfolio. 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.
Has a 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.
Here are three of the 10 stocks that passed the screen:
Phathom Pharmaceuticals is a clinical-stage biopharmaceutical company. Phathom Pharmaceuticals currently carries a Zacks Rank #2. PHAT has an expected earnings growth rate of 18.6% for the current year.
Universal Stainless & Alloy Products is a mini-mill that manufactures and markets semi-finished specialty steels, including stainless steel, tool steels and other alloy steels. Universal Stainless & Alloy Products currently carries a Zacks Rank #2. USAP has an expected earnings growth rate of 160.8% for the current year.
Arlo Technologies provides a cloud-based platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific regions. Arlo Technologies currently carries a Zacks Rank #2. ARLO has an expected earnings growth rate of 442.9% for the current year.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2117946/3-top-breakout-stocks-worth-a-buy-for-attractive-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.
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Strong Stocks that Should Be in the News
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Universal Stainless & Alloy Products, Inc. (USAP) : Free Stock Analysis Report
Arlo Technologies, Inc. (ARLO) : Free Stock Analysis Report
Phathom Pharmaceuticals, Inc. (PHAT) : Free Stock Analysis Report
