Hey There, Trader
Today I am adding a new stock to the Traders Daily Direction watchlist.
If you are not yet familiar, the watchlist is made up of stocks on my radar right now.
They are showing signs of a potential breakout and check all the boxes for a strong surge.
This week, I am adding Cowen (COWN) to the list.
Cowen is a storied and highly successful specialized small cap investment bank headquartered in New York.
And it checks every box on the Stock Surge Indicator…
- Triple momentum higher
Notice how the 50-day moving average is above the 100-day moving average which is above the 20-day. The stock is also trading above the 50-day line.
- Price at least 30% above its 52-week low
COWN stock is a staggering 244% above is 52-week low.
- Revenue growing at least 25% per year
Sales grew by 283% last quarter versus a year prior. Triple digit revenue growth is found in almost every super surging stock.
- Surge score above 75
COWN has a surge score of 95/100. In other words, it is outperforming 95% of stocks in the market.
- Custom Money Flow indicator above 50
Even though shares have been consolidating since mid-March, the MFI reading remains above 50.
So, why do I believe a breakout is imminent?
Let’s break it down…
As you can see in the chart above, the stock is following the decreasing volatility pattern I look for in pre-breakout stocks.
I want to see shallower and shallower dips as this is often a sign that shares are being bought up by “strong hands” thus shrinking the available supply.
COWN also has a clearly defined resistance level near the $43 mark.
This pattern of decreasing volatility and defined resistance creates the bullish ascending triangle formation.
Staying on the watchlist
OneMain Financial (OMF) and Deswell Industries (DSWL) are staying on the watchlist from last week.
Both setups still look very strong.
For OneMain Financial, I’m looking for a break above $58.00 on high volume.
And Deswell Industries needs to break the $4.00 mark to signal a breakout.