Top Growth Stocks: Trading Opportunities For Next Week - Sunday, May 1

TM Editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

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A security pattern traces the distinct movements of security prices that, once recognized, help traders to make informed trading decisions. These patterns are identified by their vital geometrical elements, which are formed by changing security prices. Let's look at some growth stock opportunities by analyzing these patterns.

Buy Signal for Battalion Oil Corp. (BATL(Head-and-Shoulders Bottom)


The bullish head-and-shoulders pattern is the opposite image of a bearish head-and-shoulders pattern. It has all the same parts—two shoulders, a neckline, and the head. Only instead of the shoulders and head being formed at high points for the stock, they are formed at low points.

The investor psychology is the opposite of the bearish pattern. The stock falls and hits a temporary low to form the left shoulder before a bounce occurs, and then it forms the left side of the neck. The upward momentum is temporary, and the next leg down takes the stock lower than the left shoulder and it forms the head.

Investors jump in thinking the new low is a buying opportunity, but then they start taking profits after a decent run up to the neckline. The profit-taking creates the next leg down, but investors often start buying on this third leg down before it gets down to the previous low. This forms the right shoulder and starts the next upward move.

Now, the momentum is to the upside and the buying pressure sends the stock above the neckline. At this point, the pattern is confirmed. After breaking above the neckline, the upward momentum is likely to continue, and the stock price would keep moving higher.

Trade Idea:

  • Buy near the breakout (entry) price – $19.23.
  • Sell at the target (exit) price – $19.96.

Buy Signals for RCM Technologies (RCMT), Precision Drilling Corp. (PDS), & North European Oil Royalty Trust (NRT)


Trade Idea:

  • Buy at the opening of the stock market on Monday if the opening price has gone up by no more than 0.5% of Friday's closing price.
  • Sell after the price has risen by 2% from Friday's closing price, or at the end of the trading week if the target is not reached.

Buy Signal for Universal Technical Institute (UTI)


Trade Idea:

  • Buy UTI at the current market price if seen as appealing.
  • Sell UTI after receiving the "sell" recommendation from trusted analyses.
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