Zacks.com Featured Highlights: Akari Therapeutics, Joint, Tailored Brands, Ardelyx And BioTime
Zacks Investment Research | Nov 30, 2017 09:33PM ET
For Immediate Release
Chicago, IL – December 1, 2017 - Stocks in this week’s article Akari Therapeutics, Plc (NASDAQ:AKTX) , The Joint Corp. (NASDAQ:JYNT) , Tailored Brands, Inc. (NYSE:TLRD) , Ardelyx, Inc. (NASDAQ:ARDX) and BioTime, Inc. (NYSE:BTX) .
5 Affordable Breakout Stocks Offering Excellent Returns
Investors with an active approach often utilize a breakout investment strategy in their quest for appreciably high returns. This involves zeroing in on stocks trading within a tight band and buying them when they move out of this band. In keeping with this approach, such stocks are sold whenever they move below this narrow band. If properly implemented, such a strategy has the ability to deliver impressive returns.
Determining Breakout Levels
The key to this strategy is calculating the support and resistance levels of a stock. The floor 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 resistance 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 close to doing so.
Has a Breakout Really 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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