Four Potential Breakout Stocks For The Rest Of The Week

In trading, there will always be elegance in simplicity. If your trading operation lacks a cadre of PhDs to crunch data like Renaissance Technologies or D.E. Shaw, simplicity will always trump excessive sophistication. The other bit of trading wisdom that should rarely be violated is “the trend is your friend.” Below, we take a look at four of the most significant bullish trends in the market right now. 

One important caveat with regard to these four stocks is that all of them are triggering very high RSI readings and could be due for sharp pullbacks as a result. Nevertheless, these stocks are making extremely powerful moves and there is a strong likelihood that the coming days could see an extension of price gains. 

Play these stocks with relatively tight stops and look for price to extend beyond your entry quickly in order to confirm continued strength and momentum. The screen used to identify these four names was stocks with a market cap above $300 million, recording new 52-week highs on above 200% average volume on Monday. In all likelihood, these names will continue to be active this week and traders should look for clear continued bullish momentum in order to trigger a long position. 

CymaBay Therapeutics CBAY 

This stock broke above its most recent high from a month ago on heavy volume on Monday. This is a terrific setup for the rest of the week if the momentum continues. 

The move started as CBAY broke above $9.00 on April 15. The stock had been consolidating between the $8 and $9 level, notwithstanding two failed breakouts above $9.00 going back to February 1. On Monday, CBAY shares closed at $9.99 and the $10.00 level is going to be key going forward. 

Bullish momentum and heavy volume above $10.00 will provide confirmation that this name may continue to run throughout the week. Monday’s chart provided clear breakout confirmation with the shares rising better than 12% and closing near highs for the session.

Posco Holdings PKX

The year-to-date chart suggests that Posco is on the verge of making a near-term parabolic move and could be vulnerable to a sharp pullback this week. Nevertheless, momentum in this name is very significant and Monday’s price action was indicative of continued strength with a rest period. 

The stock gapped up and then traded in a very narrow range throughout the session. Absolutely no sign of any real selling pressure, but the uptrend did take a breather for the day. The stock closed up a little more than 2% due to the gap at the open and price action was constricted in a tight range and almost totally flat on an intra-day basis. 

Shares have risen 50% year-to-date, 30% over the course of the last month, and a little less than 7% over the last 5 trading sessions. Headlines suggest that the momentum in the stock is based on the company’s foray into EV batteries. Traders should be looking at a break of the $80 level on heavy volume in the coming days to confirm a likely continuation of the powerful move in the name. 

Teck Resources TECK 

Shares in this Canadian natural resources company have broken out of a cup and handle pattern that was formed throughout April. The stock is now breaking above a previous consolidation range dating back to the beginning of the year and also above a price range TECK could not break out of to the upside during Spring and early Summer 2022. 

Sitting at a new 52-week and all-time high, there is evidence that this may be a sustained breakout for TECK. The expected move should take place in the coming days if this setup triggers a continued powerful rally to the upside. 

On Monday, the stock surged almost 8% with more than 15 million shares trading hands vs. an average daily volume below 5 million. This is a tremendous setup. Strength in the broader market and improving risk sentiment could be an additional catalyst for this name throughout the week. 

Asure Software ASUR

This is another really attractive setup that should have breakout traders’ attention. The stock put in a big bullish gap on February 28th after a terrific earnings report. Ever since the company’s strong Q4 earnings, volume in the name has been significantly elevated. Next, we witnessed a consolidation of price in a range that broke to the upside last week. 

Monday saw a break of $16.00 to the upside and this led to a powerful breakout with shares climbing throughout the trading session on heavy volume, notching a 4.5% gain, and closing right on the highs for the day. This is by far the smallest stock in this report, with a market cap under $400 million. 

Every single performance and technical indicator suggests continued heavy accumulation of this name. Price is 16% above the 20sma, and the stock has notched gains of 22% over the last 30 days, 70% over the last quarter, 227% over the last 2 quarters, and 79% year-to-date. It’s reasonable to expect volatility, but the likelihood of continued price appreciation in ASUR appears high.

Featured photo by Hans Eiskonen on Unsplash