Breakout Stocks Steel momentum (STLD) and Pinduoduo (PDD) is hitting new highs and stands among the few recent market winners.
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Investors may be wondering if now is a good time to take profits on these breakout stocks. The short answer is yes. Now might be a smart time to lock in at least some of the profits on both winning positions.
Steel Dynamics broke out from a 88.72 buying points on October 21 amid a post-earnings recovery. After rallying for a few weeks, the stock has finally reached 20% profit zone. Breakout stock is trading well above its price 21-day exponential moving average and shows no signs of slowing down, however.
STLD was up about 4% on Friday and maintains an Accumulation/Distribution Rating of A, which indicates the stock is being accumulated by large institutions.
Meanwhile, shares of Chinese e-commerce platform Pinduoduo also hit profit zone on Friday. The stock broke out from a buy point of 73.12 last Monday and skyrocketed, reaching a profit zone in less than a week. In fact, Pinduoduo’s stock is up more than 30% in the past week.
The breakout stock received a boost from strong Q3 earnings, announced Monday, and posted a 12% gain in a single day. The company’s EPS increased by 256 percent year-on-year while revenue grew by 50 percent.
Shares have edged higher on high volume this week amid a rally in Chinese stocks. Investors are hoping that Chinese health officials will further loosen their zero-tolerance approach to the recent Covid outbreak.
Breakout stocks to watch: ADP
In other places, ADP (ADP), another notable breakout stock, has hit a new 52-week high. Stocks exploded last week from 261.69 cup base buy points. ADP is currently in the 5% buy zone, which means the stock is still buyable.
ADP provides human resource outsourcing services such as payroll services, tax and compliance services, benefits, etc.
The stock is trading above its 21-day and 50-day moving averages, according to MarketSmith.
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