For Immediate Release
Chicago, IL – February 13, 2019 - Stocks in this week’s article are Ready Capital Corp. RC, Gladstone Investment Corp. GAIN, NeoGenomics, Inc. NEO, Digi International Inc. DGII and Paramount Group, Inc. PGRE.
5 Breakout Stocks for Stellar Returns
Picking breakout stocks is one of the most favored methods for those utilizing an active investing approach since this strategy offers the promise of superlative returns. This method involved zeroing in on those stocks whose prices are varying within a narrow band.
If the price of the stock falls below this channel, it could be the best time to sell of this stock. However, the best time to buy a stock as per this strategy is when it is about to break above this trading band. Such stocks offer the prospect of impressive gains.
Identifying Breakout Stocks
The essence of this strategy lies in calculating the support and resistance levels of a stock. The lower bound of a stock’s trading channel is its support level and it should be sold as soon as it threatens to fall lower. On the other hand, the ceiling is a stock's breakout level and it can gain substantially if it breaks the resistance level.
When a stock is close to its support level, demand is literally hitting the floor. On the other hand, demand rises when it is breaching its resistance level, signaling the right time to make a lucrative addition to your portfolio. The idea is to pick stocks which have just broken above their resistance barriers or are very closing to doing so.
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 at all 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 which may not seem attractive at first glance.
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Digi International Inc. (DGII) : Free Stock Analysis Report
Gladstone Investment Corporation (GAIN) : Free Stock Analysis Report
NeoGenomics, Inc. (NEO) : Free Stock Analysis Report
Paramount Group, Inc. (PGRE) : Free Stock Analysis Report
Ready Capital Corp (RC) : Free Stock Analysis Report
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