Zacks.com Highlights: Net 1 UEPS Technologies, Protagonist Therapeutics, Tilly's, Nuance Communications And Dorian LPG
Zacks Investment Research | Dec 17, 2017 08:32PM ET
For Immediate Release
Chicago, IL – Dec 18, 2017 - Stocks in this week’s article include: Net 1 UEPS Technologies, Inc. (NASDAQ:UEPS) , Protagonist Therapeutics, Inc. (NASDAQ:PTGX) , Tilly's, Inc. (NYSE:TLYS) , Nuance Communications, Inc. (NASDAQ:NUAN) and Dorian LPG Ltd. (NYSE:LPG) .
Screen of the Week of Zacks Investment Research:
5 Breakout Stocks Generating Exceptional Returns
Picking breakout stocks is probably one of the most popular techniques used by active investors. The logic behind this kind of stock selection is to determine stocks that are trading within a narrow channel. Such stocks are to be purchased as soon as they move above this band and are sold when they fall below. In case a stock moves above this band, it usually gains momentum and offers the promise of considerably high returns.
Spotting Prospective Candidates
In order to identify breakout stocks, you must first determine their resistance and support levels. A resistance level is the barrier which must be broken so as to be identified as a breakout stock. Meanwhile, a support level is the floor for the stock’s movement.
At the breakout level, demand for the stock has peaked, making it a natural choice for traders. On the other hand, when a stock hits the support floor, traders are eager to offload it. In order to spot breakout stocks, you would have to see which of these are on the brink of breaking the resistance barrier or those which have just breached this level.
Verifying 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: Original post
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