As March 2017 kicks off InvestingHaven’s research team selected 3 beautiful breakout stocks. Those stocks test a long term resistance level after multiple unsuccessful attempts in the past. If they go higher from that resistance level they break out (in technical terms) from resistance which implies they could go significantly higher.
The one caveat with a breakout stock is that the break can be false, in which case the stock falls back below the resistance level. On the other hand, mostly the breakout level gets tested again to confirm that it became support, that mostly comes with a lot of tension among investors.
Three breakout stocks as March 2017 kicks off
Amgen is one of the largest health care stocks. Its chart shows how the stock tried to break out from $174 twice in the last 18 months. Visibly, both attempts failed.
Interestingly, Amgen could be a breakout stock but the link to Nasdaq.com shows how 4 out of 7 analysts give the stock a high score.
From our perspective, we see that Amgen looks much better than its sector. Compared to its peers in the health sector Amgen’s chart setup looks much stronger. Most health stocks broke down, but Amgen stood strong. This 3d attempt could be the real deal, watch $175 in this breakout stock.
Delta Air Lines (DAL) attempted already 6 times to break out from the $50 to $51 area, but all attempts failed. The pattern of DAL is very similar to the one from Amgen (see above). Only if DAL remains at least 5 consecutive days above the $51 level investors can consider it to be a confirmed breakout.
From a sector perspective, the breakout in airline stocks took place early 2017 as seen on the second chart in the linked article. The median stock price target for breakout stock DAL is $62 according to Barron’s. That should not be a leading indicator to any investor, as analysts tend to follow the trend.
From an anecdotal point of view, certainly not an important indicator, the retail investor sentiment on DAL is high.
Ring Central is slightly different from the other 2 breakout stocks in that it already started a to break out this week. Also, this is the 2nd breakout attempt.