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Zacks.com featured highlights include: Rent-A-Center, BioDelivery , Seabridge, Marchex and DSP

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US-Iran and US-China relations have worsened of late. The flare-up in geopolitical tensions could result in a rally in safe-haven ETFs.

For Immediate Release

Chicago, IL – January 15, 2019 - Stocks in this week’s article are Rent-A-Center, Inc. RCII, BioDelivery Sciences International, Inc. BDSI, Seabridge Gold Inc. SA, Marchex, Inc. MCHX and DSP Group, Inc. DSPG.

5 Breakout Stocks Offering Impressive 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 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.

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 genuine 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.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/347160/5-breakout-stocks-offering-impressive-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

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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