NEW YORK โ U.S. stocks retreated from record levels on Monday as they head into the home stretch of what looks to be their latest winning month.
The S&P 500 fell 19.27 points, or 0.4%, to 5,069.53 after closing last week at a record high. The Dow Jones Industrial Average fell 62.30, or 0.2%, to 39,069.23, and the Nasdaq composite fell 20.57, or 0.1%, to 15,976.25.
The S&P 500 is on track to close out its fourth consecutive month of gains and is coming off its 15th winning week in the last 17. And the stock market may not have been cheap even when it bottomed in October 2022. That marked the most expensive bassist. -The market is at the lowest level in history, by some measures of stock prices versus corporate profits, says Doug Ramsey, chief investment officer at Leuthold.
This recent rally began last October amid hopes that inflation is getting cold enough to the federal reserve cut interest rates several times this year. Such cuts would ease pressure on the economy and financial system, while raising investment prices.
People are also reading...
Expectations for rate cuts at some point this year remain high, but traders have been pushing back their forecasts after some Better-than-expected economic reports. Meanwhile, that data raises hopes that companies' earnings growth could strengthen, which also helps stock prices.
Homebuilder stocks were mixed after a report showed new home sales strengthened less last month than economists expected.
Intuitive Machines lost more than a third of its value after the company said its lunar lander could stop working on Tuesday after landed on his side near the south pole of the moon.
Last week, stocks got one big boost after another. Spectacular report from Nvidia added more friends to the frenzy that has already been created around artificial intelligence technology. Nvidia, whose chips help power artificial intelligence technologies, rose another 0.3% on Monday.
The earnings reporting season for the big S&P 500 companies is coming to a close, but this week still offers updates from several big names. They include several that could shed light on how well American household spending is holding up. This spending has been one of the main reasons why the US economy has exceeded expectations in the face of a possible recession.
Regarding the economic calendar, the US government will give the latest update on Thursday on the inflation measure that the Federal Reserve prefers to use. The hope on Wall Street is that inflation will continue to cool quickly enough to convince the Federal Reserve to start cutting rates in June.
Treasury yields rose in the bond market. The 10-year Treasury yield rose to 4.27% from 4.25% late Friday.
7 Proven Strategies to Identify Potential Breakout Stocks and Boost Your Investment Portfolio
7 Proven Strategies to Identify Potential Breakout Stocks and Boost Your Investment Portfolio
A stock that breaks above its support or resistance level is considered a breakout stock. These levels represent the price points that the stock has struggled to surpass over a specific period. Breakouts are considered a strong indicator that the stock is likely to continue its uptrend.
However, identifying notable stocks that will perform well in the future can be challenging. To spot potential winners, you need to use a combination of analysis and intuition. It is important to remember that investing in individual stocks can be risky and there is no guarantee that a single stock will perform well. If you need help with your investment plan, a financial advisor can play a valuable role in helping you spot potential emerging stocks by using their expertise to balance risk and potential rewards.
Bank fee has compiled seven ways to identify and profit from potential breakout stocks.
1. Look for companies with a competitive advantage
If you want to look for stocks that can break through your resistance level, focus on companies with a competitive advantage. These companies are more likely to outperform their peers, increasing the chances of a breakout. Look for companies with proprietary technology, strong brand recognition, or unique business models. All of these factors could give them an advantage over their competitors, increasing the chances of a stock market breakout.
canva
2. Keep an eye on key market trends
Anyone who deals in stock trading must keep an eye on market trends, and top stock traders are no exception. By keeping an eye on market trends, you can Identify sectors that can experience growth. in the near future. Pay attention to areas where demand is increasing and where there is room for new players to enter the market.
3. Monitor volume and price
One way to identify potential breakout stocks is to look for those with increasing volume and price momentum. Emerging stocks often have a sudden increase in trading volume, which can indicate growing investor interest. Also, keep an eye on stocks that are breaking out key resistance levels or forming bullish chart patternssuch as cup and handle, ascending triangles or flag patterns.
4. Identify companies with solid fundamentals
To identify promising companies, look for those with strong fundamentals, such as higher revenues, higher profits, and positive cash flow. Those indicators suggest that they are doing well financially and that these companies tend to be more likely to blow up. You can find these numbers at quarterly reports or with a web search for โ(company name) earnings.โ
canva
5. Track the Relative Strength of a Stock
Even if a stock seems strong, remember that everything is relative. To evaluate a stock, it is important to compare it to its sector or peers and make sure it is strong compared to other alternatives. Emerging stocks typically outperform the market and their sector, indicating potential for further growth. The Relative Strength Index (RSI) is a technical indicator commonly used to measure the strength of a stock relative to its peers.
6. Watch for catalysts
Catalysts are recent events that could drive stock prices up. These could include successful product launches, favorable regulatory decisions, or mergers and acquisitions. Also watch for positive earnings surprises and upward revisions to earnings estimates. As you can see, anything that creates a positive outlook for the company's earnings can contribute to a breakout.
7. Exit at your target price
Once the stock reaches its target price, it is advisable to exit the position and take profits. Typically, stocks that break through their resistance levels tend to go back down shortly afterward. This is one of the reasons why it is important not to drag your feet when trying to get out of the position. When that time comes, make sure you keep going and look for your next opportunity.
Bottom line
While identifying top stocks is no easy task, it can give your portfolio a significant edge. Look for companies that appear strong by checking their fundamentals, comparing them to the market, and looking for companies with a competitive advantage. These are just a few of the ways you can profit from stocks that are about to break through their resistance lines.
This story was produced by Bank fee and reviewed and distributed by Stacker Media.
canva
