Using chart patterns is a great way to identify entry and exit points for stock trading. Charts can tell you if a stock is trending up, down, or sideways, and indicate likely future direction.
These 5 micro-caps are exhibiting bullish patterns which point to more gains ahead. Use the charts to your advantage to guide your trading.
Leaf Group Ltd. (NYSE: LFGR) has been forming a cup-and-handle pattern for most of 2018. The stock sold off from $10 to just below $7, and has then risen back to $10 completing the pattern in early June.
After completing the cup and handle the stock has broken out to the upside to touch $11. The stock can be purchased between $10 and $11 with a stop at $10 for limited downside risk.
First Community Corporation (NASDAQ: FCCO) is one of several small regional banks that have performed well in 2018 and are now breaking out of resistance levels.
After a shallow dip early in the year, from $22.60 to $20.85, the stock has now rallied to over $25. For First Community this is a new high, not seen since the stock traded to $24.50 in early 2004.
Stocks breaking to new all time highs have no resistance levels as sellers who bought near the earlier highs sell stock when they return to even. With interest rates rising, FCCO and several regional banks are set to do some open field running to the upside.
After basing between $8 and $11 for most of 2017, in November of last year IRadimed Corporation (NASDAQ: IRMD) broke out to trade around the $13 level by year end.
The stock traded between $13 and $16 until May of this year, when it again broke to new highs and is now in a tight trading range between $18 and $19. Look for the stock to break out of the $19 resistance level on good volume to catch the next leg up in IRMD.
Champion Oncology, Inc. (NASDAQ: CSBR) has been on a tear since late May. The stock broke through long-term resistance levels at $4.75, and quickly ran to over $7.
There was a slight pause in mid-June as the stock touched $6 and then eased back to $5.50 over the next few days. Look for another pullback, or sideways trading pattern for a few days, before pulling the trigger on this red-hot biotech.
Rising interest rates benefit companies taking in cash on a regular basis. As an insurance company, FedNat Holding Company (NASDAQ: FNHC) collects a lot of cash.
The stock has risen along with rising rates, but has pulled back slightly from recent highs just over $24. The stock touched $21 before trading back up to the $22.50 level. FedNat could be purchased here, in the middle of the pullback, or as it breaks through the $24 level on volume.
These 5 micro-caps are generating healthy stock patterns that could add a nice percentage return to your bottom line. Following the charts, and identifying good entry points, is a great way to enhance returns.
Disclaimer: The author and Spotlight Growth has no positions in any of the stocks mentioned in this article. Nor does either party currently have any relationship, or any other conflicts of interest, with any of the companies mentioned in this article. This content is meant for informational and entertainment purposes only and should not be meant as a recommendation to buy or sell any securities. Please visit a licensed financial representative to determine what investments are right for you.
Article By: Steven Adams