Potential Breakout: 5 Stocks To Watch

The purpose of the article is to show readers some companies that could potentially breakout a resistance shortly. Unlike the other articles that is published here on BullDude.com which refers to companies that have already breakout a resistance, this article shows some companies that have a chart configuration that increases the probability to breakout the next resistance and continue the positive trend. By anticipating entry, the potential gain may be greater, but the potential risk is higher.

Inside the charts below there is a black half-line (with relative price) which represents the first resistance where the breakout can occur and continue growing.


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What is a Resistance?

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A resistance is an area where price growth has stopped once or several times, without ever being able to overcome it. We can define it as a real obstacle. So if the company is able to overcome (breakout) this obstacle, after being stopped previously, the chances of the price continuing to rise increase. Furthermore, prices are more likely to continue rising, the stronger the underlying positive trend.

Real example of Potential Breakout

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Below is a chart of a company that appeared in a “Potential Breakout” article here on BullDude.com.

Potential Breakout: Fiverr International Ltd. (FVRR)

As shown in the chart above, Fiverr International Ltd. (FVRR) was reported in the “Potential Breakout: 4 Interesting Stocks To Watch” article of June 18, 2020 as a company with a potential breakout within a few days. Already on June 25 Fiverr has made the breakout and since June 18 it has grown by + 24%.

How do I know if it’s a false potential breakout?

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The potential breakout is defined as “false” when the positive trend that supported the price growth reverses the direction (going from positive to negative). To understand when this event occurs, there is a red half-line in the chart that indicates the level below which the positive trend can be considered concluded.

A few negative days are not enough to call it a “false” potential breakout because often the cause is natural temporary volatility (given by the retest of the signal level or profit taking or general market crash).


Potential Breakout

Lam Research Corp (LRCX)

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