Zacks.com strengths include Mercer International, Solaris Oilfield Infrastructure and Amalgamated Financial
For immediate release
Chicago, IL – May 10, 2022 – The stocks in this week’s article are Mercer International MERC, Solaris Oilfield Infrastructure SOI and Amalgamated Financial AMAL.
3 Best Breakout Stocks to Buy for Strong Returns
The active investing approach is generally to pick breakout stocks, or in other words, to look for stocks whose prices fluctuate within a specific range. It is prudent to unload the stock if it falls below the lower limit of this band. Likewise, once the stock breaks above this channel, it is likely to generate significant gains.
Focus on actions in small groups
In order to select the right breakout stock, one must first calculate its support and resistance level. A support level is the lower limit of stock movements, while a resistance level refers to the maximum price it trades in over a considerable period of time.
In other words, demand for a stock is bottoming out at its support level, which means most traders are ready to sell it. At the resistance level, most traders are willing to go long stocks, which means they would like to add them to their portfolio. The key to identifying breakout stocks is to focus on those that are about to break out or those that have just broken above the resistance level.
Did a breakout really happen?
The main risk associated with such a strategy is that the decision to buy an apparent candidate was not made at the right time. When a stock breaks above the resistance level, it should be a hot commodity for traders. Whether such an escape is genuine, however, is another matter altogether.
For a true breakout, the stock’s prior 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 only be determined by such a study. Despite the risk of misidentification, correctly identifying these stocks can generate considerable returns, even at a price that may not seem attractive at first glance.
Here are three of the five stocks that have passed the screen:
Mercier International owns and operates a diversified pulp and paper business in the southern German states of Saxony and Thuringia, in the former East Germany. Mercer International currently carries a No. 1 Zacks rank. MERC forecasts a 29.1% profit growth rate for the current year.
Solaris Oilfield Infrastructure manufactures and supplies patented mobile proppant management systems. Solaris Oilfield Infrastructure currently carries a Zacks rank of #2. SOI has an expected earnings growth rate of 983.3% for the current year.
Merged Financial is the bank holding company of Amalgamated Bank, a full-service commercial bank and chartered trust company. Amalgamated Financial currently sports a No. 1 Zacks rank. AMAL forecasts a 34.9% profit growth rate for the current year.
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For the rest of this article on Screen of the Week, please visit Zacks.com at: https://www.zacks.com/stock/news/1918467/3-top-breakout-stocks-to-buy-for -solid-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 the options mentioned herein. An affiliated investment advisory firm may hold or have shorted securities and/or hold long and/or short positions in options mentioned herein.
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Contact: Jim Giaquinto
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Mercer International Inc. (MERC): Free Stock Analysis Report
Solaris Oilfield Infrastructure, Inc. (SOI): Free Inventory Analysis Report
Amalgamated Financial Corp. (AMAL): Free Share Analysis Report
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