Zacks.com Highlights: Drive Shack, Cerus, ReWalk Robotics, Aerohive Networks And Cloud Peak Energy
Zacks Investment Research | Nov 14, 2017 09:38PM ET
For Immediate Release
Chicago, IL – November 15, 2017 - Stocks in this week’s article include: Drive Shack Inc. (NYSE:DS) , Cerus Corporation (NASDAQ:CERS) , ReWalk Robotics Ltd. (NASDAQ:RWLK) , Aerohive Networks, Inc. (NYSE:HIVE) and Cloud Peak Energy Inc. (NYSE:CLD) .
Screen of the Week of Zacks Investment Research:
5 Breakout Stocks Offering Admirable Returns
Favored yet divisive, picking breakout stocks remains a popular strategy among active investors. The idea is fairly simple -- to identify stocks trading within a narrow band and buy them when they move above this channel or sell when they move below. If a stock trends above the channel, it promises substantial gains for investors.
But critics warn of the risk of timing such a move or identifying a wrong breakout level. However, when executed correctly, this strategy can yield lucrative gains, which explains its enduring popularity.
Spotting Breakout Stocks
The first step to selecting the right breakout stocks is to calculate their support and resistance levels. 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 pin down those that are on the verge of a breakout or those that have just broken above the resistance level.
Determining 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.
And that's what we're screening for today…
For the rest of this Screen of the Week article please visit Zacks.com at: Zacks Investment Research
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