Technical Analysis: 3 Stocks That Are Breaking Out to the Upside

Rick Orford

Fri, Oct 27, 2023, 3:40 AM 4 min read

Breakout stocks offer some of the best opportunities to traders and investors. The strategy takes advantage of stocks moving potentially higher than their current high and continue their trend by breaking out of their trading range. While some would trade breakouts as a short-term play, it can also be a way to scale up on existing positions for trend trades and long-term plays.

Investors can use different sets of strategies and entry techniques to optimize their entry by either buying during the breakout or waiting for prices to retest on their resistance-turned-support area. Alternatively, investors can supplement the strategy with technical indicators like moving averages, relative strength indices, MACD, etc. Indeed, these indicators can help provide context on the trades, and the price movement supports the breakout idea. This article will look at three stocks that are breaking out.

Fair Isaac Corporation (FICO)

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Fair Isaac Corporation (NYSE:FICO) is a software and scoring analytics company that provides clients with predictive credit and other scores to help its customers’ decision-making process. Its product segments can be divided in the software segments for its pre-configured analytics solutions and its business-to-business scoring solutions. Also, the company has built a reputation of being the go-to scoring provider for the securitization market. And, if that’s not enough, its dedication to innovation and providing clients with a robust tool to mitigate risk has garnered awards like the recent Banking Innovation of the Year 2023.

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FICO is one stellar performer. Its price is up 40% YTD and shows no signs of slowing down. The company is loved by breakout and momentum traders due to its strong trend strength and continuous 52-week breakouts. Fair Isaac missed quarterly EPS estimates by 7.01% earlier in March but came back strong with an 8.18% increase in earnings in its latest quarter ending June 2023. Analysts recommend FICO as a “Strong Buy” with a high target of $1,100.00, an upside of 18.64%. I think that FICO is one of the best breakout stocks right now, but investors looking to jump in on the trend for another potential breakout can wait to see how prices behave around its 52-week high in the coming days.

Targa Resources Corp.(TRGP)

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Targa Resources Corp. (NYSE:TRGP) is a midstream services provider with various infrastructure assets that deliver energy across the United States. Its diversified portfolio is focused on gathering, transporting and processing natural gas liquids (NGL) and NGL products alongside liquified petroleum gas and crude oil. The company is one of the largest infrastructure companies that transports and delivers NGL and natural gas in the United States. Its Permian Basin processing and gathering position is the largest in the area. With the continued strength of the energy markets, TRGP is one of the companies traders and investors should watch out for.

TRGP is trading near its 52-week high, up by 21% YTD, and prices have retested the resistance high for the third time. It previously had a v-shape recovery during the first week of October, showing that the stock’s trend is still quite strong. Investors looking to buy into TRGP can wait and see how prices behave near its resistance in the next few days for a confirmed breakout. Analysts highly recommend the company according to their “Strong Buy” consensus rating. Finally, analysts peg TRGP with a $119.00 estimate within the next 12 months, giving traders and investors a 37.73% potential upside, earning it a spot on our list of breakout stocks to buy.

Chord energy (CHRD)

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Chord Energy Corporation (NASDAQ:CHRD) is a gas and oil exploration company that produces NGL, natural gas and crude oil. The company’s production mainly focuses on Three Forms Formation and Middle Bakken acreage. CHRD operates at a rate of 119,785 net barrels of oil equivalent per day and an average of 95,992 barrels of oil per day for its oil production. Moreover, its acquisition of the Williston Basin assets helped increase its inventory runway and its existing portfolio’s competitiveness.

CHRD is currently on its way to retesting its resistance around the $181.34 high. Indeed, prices have been incrementally moving up and have formed an upward-sloping channel. CHRD is up 25% YTD with an upside potential of 33.18% based on analysts’ 12-month high target price. Investors and traders interested in an energy play can look into CHRD as a potential breakout as the oil and gas market strengthens. However, its susceptibility to commodity prices needs constant attention from traders willing to buy positions.

On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.